Page 245 - Individual Forms & Instructions Guide

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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
property, see Rental of Nondepreciable or not you used the unit as a home in Generally, rental real estate activity is
Property in Pub. 925 . 2022. You used the unit as a home if reported on Schedule E even if it is also
Self-rental. Enter code “7” for your personal use of the unit was more a trade or business activity; however, if
self-rental if you rent property to a trade than the greater of: you provided significant services to the
or business in which you materially par- • 14 days, or renter, such as maid service, report the
ticipated. See Rental of Property to a • 10% of the total days it was rented rental activity on Schedule C, not on
Nonpassive Activity in Pub. 925 for de- to others at a fair rental price. Schedule E. Significant services do not
tails about the tax treatment of income If you did not use the unit as a home, include the furnishing of heat and light,
from this type of rental property. you can deduct all your expenses for the cleaning of public areas, trash collec-
Other. Enter code “8” if the property is rental part, subject to the at-risk rules tion, or similar services.
not one of the other types listed on the and the passive activity loss rules ex- If you were a real estate dealer, in-
form. Attach a statement to your return plained earlier. clude only the rent received from real
describing the property. If you did use the unit as a home and estate (including personal property
rented the unit out for fewer than 15 leased with this real estate) you held for
Line 2 days in 2022, do not report the rental in- the primary purpose of renting to pro-
If you rented out a dwelling unit that come and do not deduct any rental ex- duce income. Do not use Schedule E to
you also used for personal purposes dur- penses. If you itemize deductions on report income and expenses from rentals
of real estate you held for sale to cus-
ing the year, you may not be able to de- Schedule A, you can deduct allowable
duct all the expenses for the rental part. interest, taxes, and casualty losses. tomers in the ordinary course of your
business as a real estate dealer. Instead,
“Dwelling unit” (unit) means a house, If you did use the unit as a home and
apartment, condominium, mobile home, rented the unit out for 15 or more days use Schedule C for those rentals.
boat, or similar property. in 2022, you may not be able to deduct For more details on rental income,
For each property listed on line 1a, all your rental expenses. See Pub. 527 see Pub. 527.
report the number of days in the year for more information. Rental income from farm production
each property was rented at fair rental Regardless of whether you used or crop shares. Report farm rental in-
value and the number of days of person- ! the unit as a home, expenses come and expenses on Form 4835 if:
al use. CAUTION related to days of personal use • You are an individual,
A day of personal use is any day, or do not qualify as rental expenses. You • You received rental income based
part of a day, that the unit was used by: must allocate your expenses based on on crops or livestock produced by the
• You for personal purposes; the number of days of personal use to to- tenant, and
• Any other person for personal pur- tal use of the property. For example, you • You did not materially participate
poses, if that person owns part of the used your property for personal use for in the management or operation of the
unit (unless rented to that person under a 7 days and rented it for 63 days. In most farm.
“shared equity” financing agreement); cases, 10% (7 ÷ 70) of your expenses Line 4
• Anyone in your family (or in the are not rental expenses and cannot be
family of someone else who owns part deducted on Schedule E. Report on line 4 royalties from oil, gas,
of the unit), unless the unit is rented at a or mineral properties (not including op-
fair rental price to that person as his or QJV. Check the box for “QJV” if you erating interests); copyrights; and pat-
her main home; owned the property as a member of a ents. Use a separate column (A, B, or C)
• Anyone who pays less than a fair qualified joint venture reporting income for each royalty property.
rental price for the unit; or not subject to self-employment tax. See If you received $10 or more in royal-
• Anyone under an agreement that Qualified Joint Venture, earlier. ties during 2022, the payer should send
lets you use some other unit. Line 3 you a Form 1099-MISC or similar state-
Do not count as personal use: ment by February 1, 2023, showing the
• Any day you spent working sub- If you received rental income from real amount you received. Report this
stantially full time repairing and main- estate (including personal property amount on line 4.
taining the unit, even if family members leased with real estate), report the in- If you are in business as a self-em-
used it for recreational purposes on that come on line 3. Use a separate column ployed writer, inventor, artist, etc., re-
day; or (A, B, or C) for each rental property. In- port your royalty income and expenses
• Any days you used the unit as your clude income received for renting a on Schedule C, not on Schedule E.
main home before or after renting it or room or other space.
offering it for rent, if you rented or tried Any other income should be included You may be able to treat amounts re-
to rent it for at least 12 consecutive and reported on line 3, with a statement ceived as “royalties” for the transfer of a
months (or for a period of less than 12 attached to your return. patent or amounts received on the dis-
consecutive months at the end of which If you received services or property posal of coal and iron ore as the sale of a
you sold or exchanged it). instead of money as rent, report the fair capital asset. For details, see Pub. 544.
Whether or not you can deduct ex- market value of the services or property Enter on line 4 the gross amount of
penses for the unit depends on whether as rental income on line 3. royalty income, even if state or local

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