If you do not rent your property to make a profit, you cannot deduct rental expenses in excess of the amount of your rental income. You cannot deduct a loss or carry forward to the next year any rental expenses that are more than your rental income for the year.
Report your not-for-profit rental income on Schedule 1 (Form 1040), line 8.
Post the income as follows:
- Down the left side of the screen, click Federal.
- Down the left side of the screen, click Wages & Income.
- Scroll down to Less Common Income and click on the dropdown menu.
- To the right of Miscellaneous Income, 1099-A, 1099-C, click the Start / Revisit button.
- To the right of Other reportable income, click the Start / Revisit button.
- At the screen Any Other Taxable Income, click Yes.
- At the screen Other Taxable Income, enter a description such as “Not for profit rental” and the amount.
- Click Continue.
If you itemize your deductions, include your mortgage interest (if you use the property as your main home or second home) and real estate taxes from your not-for-profit rental activity when figuring the amount you can deduct on Schedule A.
See Not Rented For Profit, page 25, IRS Publication 527 Residential Rental Property.
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