Checklist of What Rules and Information the IRS Will Be Verifying

Deductions & Expenses - Rental Expenses

____ You deducted as rental expenses only those items which relate to the rental portion of your property.

____ Expenses incurred before the property was available for rent are being capitalized or recovered through depreciation.

____ Since expenses incurred for the purpose of converting rental property back to personal use are personal expenditures, you did not deduct them.

____ Since you used your home as your personal residence while it was rented your expense deductions are limited to the income you received as rent. You did not deduct a loss from this rental.

____ If you meet the requirements of an active participant in rental activities, you are allowed to offset up to $25,000 ($12,500 if married filing separate) of nonpassive income with the net losses from all rental activities. Your net loss from these activities was under the limitation.

____ The amount you spent as part of a general plan of reconditioning, improving or altering your property were not deducted as repairs.

____ You did not deduct amounts spent which increased the value of the property, extended its useful life or made it adaptable to a different use.

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