Table 2. Worksheet for Figuring the Limit on Rental Deductions for a Dwelling Unit Used as a Home. Summary: This is an example of the worksheet (with instructions) used to determine the limitations on the rental deduction
claimed on a
dwelling unit used as a home. The line items to be completed are:
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“1. Enter rents received” field
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“2a. Enter the rental portion of deductible home mortgage interest (see instructions)” field
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“2b. Enter the rental portion of real estate taxes” field
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“2c. Enter the rental portion of deductible casualty and theft losses (see instructions)” field
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“2d. Enter direct rental expenses (see instructions)” field
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“2e. Fully deductible rental expenses. Add lines 2a-2d” field
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“3. Subtract line 2e from line 1. If zero or less, enter zero” field
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“4a. Enter the rental portion of expenses directly related to operating or maintaining the dwelling unit (such as repairs,
insurance, and
utilities)” field
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“4b. Enter the rental portion of excess mortgage interest (see instructions)” field
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“4c. Add lines 4a and 4b” field
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“4d. Allowable operating expenses. Enter the smaller of line 3 or line 4c” field
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“5. Subtract line 4d from line 3. If zero or less, enter zero” field
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“6a. Enter the rental portion of excess casualty and theft losses (see instructions)” field
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“6b. Enter the rental portion of depreciation of the dwelling unit” field
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“6c. Add lines 6a and 6b” field
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“6d. Allowable excess casualty and theft losses and depreciation. Enter the smaller of line 5 or line 6c” field
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“7a. Operating expenses to be carried over to next year. Subtract line 4d from line 4c” field
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“7b. Excess casualty and theft losses and depreciation to be carried over to next year. Subtract line 6d from line 6c”
field
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