Page 246 - 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.
taxes were withheld from oil or gas pay- tivities (as in fleet operations). You can- Lines 12 and 13
ments you received. Include taxes with- not use actual expenses for a leased ve-
held by the producer on line 16. hicle if you previously used the standard In most cases, to determine the interest
mileage rate for that vehicle. expense allocable to your rental activi-
General Instructions for ties, you must have records to show how
Lines 5 Through 21 You can use the standard mileage the proceeds of each debt were used.
rate for 2022 only if you: Specific tracing rules apply for allocat-
Enter your rental and royalty expenses • Owned the vehicle and used the ing debt proceeds and repayment. See
for each property in the appropriate col- standard mileage rate for the first year Pub. 535 for details.
umn. You can deduct all ordinary and you placed the vehicle in service; or
necessary expenses, such as taxes, inter- • Leased the vehicle and are using Limitation on business interest. Inter-
est you paid as part of your rental real
est, repairs, insurance, management fees, the standard mileage rate for the entire
agents' commissions, and depreciation. lease period (except the period, if any, estate activity is not subject to the limi-
tation on business interest unless your
before 1998).
Do not deduct the value of your own rental real estate activity is a trade or
labor or amounts paid for capital invest- If you take the standard mileage rate, business. If your rental real estate activi-
ments or capital improvements. multiply the number of miles driven in ty is a trade or business, you must file
connection with your rental activities by Form 8990 to deduct any interest expen-
Enter your total expenses for mort- ses of that rental real estate activity un-
gage interest (line 12), depreciation ex- 58.5 cents a mile from January 1, 2022, less you meet one of the filing excep-
to June 30, 2022. Multiply the number
penses and depletion (line 18), and total tions in the Instructions for Form 8990.
expenses (line 20) on lines 23c through of miles driven in connection with your If the interest you paid in your rental
rental activities from July 1, 2022, to
23e, respectively, even if you have only real estate trade or business is limited,
one property. December 31, 2022, by 62.5 cents a
mile. Include this amount and your park- figure the limit on your business interest
Renting out part of your home. If you ing fees and tolls on line 6. expenses on Form 8990 before complet-
rent out only part of your home or other ing lines 12 and 13. Follow the instruc-
property, deduct the part of your expen- You cannot deduct rental or tions under How to report, later, but re-
ses that applies to the rented part. ! lease payments, depreciation, port the reduced interest on lines 12 and
CAUTION or your actual auto expenses if
Credit or deduction for access expen- you use the standard mileage rate. 13. The interest you can't deduct this
ditures. You may be able to claim a tax year will carry forward to next year on
credit for eligible expenditures paid or Form 8990.
incurred in 2022 to provide access to If you deduct actual auto expenses: If your real estate activity is not a
your business for individuals with disa- • Include on line 6 the rental activity trade or business or you meet one of the
bilities. See Form 8826 for details. portion of the cost of gasoline, oil, re- filing exceptions for Form 8990, follow
pairs, insurance, tires, license plates,
You can also elect to deduct up to etc.; and the instructions under How to report,
$15,000 of qualified costs paid or incur- • Show auto rental or lease pay- later, and report all of your deductible
red in 2022 to remove architectural or ments on line 19 and depreciation on interest on lines 12 and 13.
transportation barriers to individuals line 18. How to report. If you have a mortgage
with disabilities and the elderly. on your rental property, enter on line 12
You cannot take both the credit and If you claim any auto expenses (ac- the amount of interest you paid for 2022
the deduction for the same expenditures. tual or the standard mileage rate), you to banks or other financial institutions.
must complete Part V of Form 4562 and Do not deduct prepaid interest when
Line 6 attach Form 4562 to your tax return. you paid it. You can deduct it only in the

You can deduct ordinary and necessary See Pub. 527 and Pub. 463 for de- year to which it is properly allocable.
auto and travel expenses related to your tails. Points, including loan origination fees,
rental activities, including 50% of meal charged only for the use of money must
expenses incurred while traveling away Line 10 be deducted over the life of the loan.
from home. However, business meals If you paid $600 or more in interest
are 100% deductible if the meals are Include on line 10 fees for tax advice on a mortgage during 2022, the recipient
food and beverages provided by a res- and the preparation of tax forms related should send you a Form 1098 or similar
taurant and paid or incurred after De- to your rental real estate or royalty prop- statement by February 1, 2023, showing
cember 31, 2020, and before January 1, erties. the total interest received from you.
2023. For more information, see Notice Do not deduct legal fees paid or in- If you paid more mortgage interest
2021-25.
curred to defend or protect title to prop- than is shown on your Form 1098 or
In most cases, you can either deduct erty, to recover property, or to develop similar statement, see Pub. 535 to find
your actual expenses or take the stand- or improve property. Instead, you must out if you can deduct part or all of the
ard mileage rate. You must use actual capitalize these fees and add them to the additional interest. If you can, enter the
expenses if you used more than four ve- property's basis. entire deductible amount on line 12. At-
hicles simultaneously in your rental ac- tach a statement to your return explain-

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