Form 1310 Refund for a deceased taxpayer

[1969spl311]

I cannot get the return to efile due to form 1310.  When I complete the form I receive a message that it will not efile.   If I delete the form and go to efile I receive a message that I must complete a form 1310.

What am I doing wrong?

[Anonymous_]

Form 1310 has not been finalized for use in TurboTax. It is scheduled to be finalized on 3/4/2021.

See https://care-cdn.prodsupportsite.a.intuit.com/forms-availability/turbotax_fed_online_individual.html

[thecraigs4]

This form is still not available.  Do we have a new schedule date for it to be available?

[AkinaLO]

The 1310 form is available for printing and mailing. You can mail form 1310 and e-file your tax return or mail form 1310 along with your tax return.

@thecraigs4

[thecraigs4]

I have a vacation condo.   I stayed there 84 days.  I rented it 133 days.   This made the income to not be considered passive income due to my length of stays there.  I have a loss. I do not materially participate in running the condo.   A property management company does that.  I thought that I should use Schedule E for Vacation Home Rentals.  However, TurboTax agents stated that I should put it on a Schedule C as a business.  Is this correct?  This would mean that losses can be claimed in the current year against other nonpassive income and future profit may be subject to self-employment tax.  Is Schedule C the correct way to report this?

[MarilynG1]

Regarding Schedule C versus Schedule E:

IRS Pub 527 states "If you provide substantial services that are primarily for your tenant's convenience, such as regular cleaning, changing linen, or maid service, report your rental income and expenses on Schedule C (Form 1040). Substantial services do not include the furnishing of heat and light, cleaning of public areas, trash collection, etc." 

This is interpreted as running a hotel-like business, with tenant services. If you rent a furnished condo (with kitchen items and linen, for instance), you are not necessarily running a hotel. But if you change the linen and/or provide maid services during the tenant's stay, then this could be considered running a hotel, and the activity should be reported on Schedule C.

If you believe you are not running a hotel-like business, the vacation condo rental may be reported on Schedule E. 

For more detailed info, click this link for IRS Topic No. 414 Rental Income and Expenses.

[thecraigs4]

In TurboTax, I have to mark Actively Participating to make it a nonpassive income due to staying there more than 14 days and greater than 10% of the rental days and classifying it as a home rental.  Schedule E is showing a loss which carrying over to my 1040 schedule 1.  However, it is limiting my deduction )disallowing) due to income AGI.  I thought there was no income AGI limit on nonpassive dwelling rental income.

[thecraigs4]

Also, can nonpassive losses to be carried forward or are expenses only allowed up to the nonpassive rental income amount in the current year?  I really need help with this.  Anything would be much appreciated.

[AnnetteB6]

Your use of the rental property is requiring it to be treated as a home, and therefore a non-passive activity.

This means that the rental expenses for the property must be prorated based on the time the property was rented and the time it was used as your home.  The rental portion of certain expenses (such as mortgage interest and real estate taxes) will be deductible on the current year's return.  The rental portion of operating expenses (such as repairs, maintenance, and utilities) may be limited depending on the rental income.  If these expenses are limited and not allowed to be claimed on the current year's return, they will be carried over to the next year.

The limitation you are seeing on your return is most likely the result of the division of the expenses between rental/personal use and the expenses that can be deducted and those that must be carried forward instead of a limitation based on your AGI.

Take a closer look at the Schedule E Worksheet for your property that is included as part of your tax return and the math behind the scenes may make more sense.

Also, to learn more about this subject, see IRS Publication 527 Residential Rental Property.  Your situation is fully discussed in section 5, along with some worksheets used to prorate the allowable expenses.

@thecraigs4

[Anonymous_]

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@thecraigs4 wrote:

Also, can nonpassive losses to be carried forward or are expenses only allowed up to the nonpassive rental income amount in the current year?  I really need help with this.  

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Nonpassive losses can create an NOL (net operating loss), but that would be unusual in the scenario you provided.

Regardless, if you had a net nonpassive loss, there would be no carryover. 

The expenses that are subject to the vacation home limitations (per Section 280A) will never create a net loss on your return. Those expenses are limited to the amount of your rental income.

On the other hand, if you had the (rather bizarre) situation where your rental income was $10,000 and you had, for example, total management, commissions, and advertising expenses of $50,000, you would have a net nonpassive loss which could be used against all of your other income and could, potentially, create an NOL. 

[thecraigs4]

Thanks.  The limitation of my business expenses is based on the portion that I already prorated to business.  My personal expenses were already segregated from that.  Schedule E Worksheet shows it as a limitation and disallows anything over the revenue amount.  It doesn't calculate a loss carryforward either.  It just disallows the excess business expenses.  I am still perplexed.  Even though this is nonpassive income, can't I carryforward the loss that is disallowed this year?

[Anonymous_]

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@thecraigs4 wrote:

Even though this is nonpassive income, can't I carryforward the loss that is disallowed this year?

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You cannot carryforward a loss in this instance unless the total of the expenses directly allocable to the rental exceeds the total rental income and that loss creates an NOL that you could carry forward (which would be extremely unlikely).

[Anonymous_]

If you are using a desktop version of TurboTax, you can check your figures in Forms Mode.

Look for the Schedule E Worksheet, which will show what is reported on Schedule E, the loss limitation, and how much is allocated to personal use.