It is considered a Not-For-Profit
Rental. Since you do not carry on your business or investment activity to
make a profit, you cannot use a loss from the activity to offset other income.
You do not therefore, need to depreciate.
Not Rented for
Profit
Where to
report. Report your
not-for-profit rental income on Form 1040 or 1040NR, line 21. If you are filing
Form 1040 and you itemize your deductions, you can include your mortgage
interest and any qualified mortgage insurance premiums (if you use the property
as your main home or second home), and
real estate taxes on the appropriate lines of Schedule A (Form 1040).
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.
Presumption of profit. If your
rental income is more than your rental expenses for at least 3 years out of a
period of 5 consecutive years, you are presumed to be renting your property to
make a profit.
More information. For more
information about the rules for an activity not engaged in for profit,
see Not-for-Profit Activities in
chapter 1 of Pub. 535.
To
report:
- Click on
Federal Taxes
- Wages and
Income
- You may
need to click Jump to Full List, Show me everything or I’ll choose what I
work on depending upon your situation and the TurboTax version you are
using.
- Scroll to
the very bottom; Less Common Income; Click Show more (if start isn’t
displayed)
- Click
Start across from Miscellaneous Income, 1099-A, 1099-C
- At the
“Other Taxable Income” screen, enter your description – Not for
Profit Rental and then amount of income you received.
