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June 7, 2019 4:17 PM
Thank you. but how come when I had a passive income from that rental last year it was automatically combined (by the software) with the capital gain income from stocks under "investment income" caption if they are different categories ? Thanks
It shouldn't have been combined if you filled out your tax return correctly. The passive income from the rental should have been shown on Line 17 of Form 1040, capital gains are shown on line 13 of Form 1040.
Thanks again. sorry, they were not combined on my return, instead they were combined for the purpose of qualifying for the EITC (Earned income tax credit), in other words, my investment income from stocks last year was qualifying me for that credit because it was below the maximum allowed , however the software added to it the passive income from the rental as combined "Investment income" hence exceeded the maximum allowed to qualify ! to summarize, my investment income was calculated as the sum of my stocks capital gains + passive rental income under one name. Thanks.
Investment income for the purposes of the EITC are the total of lines 8a (tax-exempt interest), 8b (taxable interest), 9a (ordinary dividends), and line 13 (capital gains). Rental income or loss does not figure into the investment income calculation.