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Video instructions and help with filling out and completing 1041 Instructions Schedule E

Instructions and Help about 1041 Instructions Schedule E

Hi this is John with PDF Tex this is Schedule II which is the form that you would use if for example you had a rental house and that's what we're going to look at today to see how that form works if you had a rental house so we're going to say that we have a taxpayer here Sam Smith and will enter his social and we're going to say that Sam purchased a rental house in June of 2022 and he collected $2,000 per month from June to December so he collected a total of twelve thousand dollars rent on his rental house we'll put that right there but we need to answer these questions here did he have payments which would require 1099 we'll say well say no he didn't but we need to we can also need to add a address here so we'll just make up some a dress like that whoops I guess we need a city - huh there we go and now we need to enter this information the type of property from the list below the list is right here and this is a single-family residence so we'll enter a one right here for type of property and then they want to know how many days was that rented so if it was rented from June to December that would be 180 days and there was no personal use days and this box doesn't apply so we'll leave that alone now we need to enter some expenses for this which goes on these lines down here so he probably had insurance that he paid her nuns well you know I've had insurance but mortgage interests that he that he paid when he bought the house so let's suppose that he had four thousand dollars of mortgage interest and then property tax I'm sure he would have paid something in property tax so let's suppose that that was three thousand and maybe something for utilities and there could be some of the things here management fees maybe or advertising I don't know whatever he paid but I'm gonna leave those blank for now and but I want to look at the depreciation on line 18 let's suppose that he bought the house for $300,000 and he decided that he wanted depreciate it of course well you can't depreciate the land so you need to you need to separate the land and the house so he's figured out that the house is worth two hundred thousand and the land it's worth one hundred thousand so he wants to depreciate two hundred thousand dollars on line 18 so to do that he will need to go down here to this forty five sixty two and in this section right here is where he will enter his depreciation so he has rent residential rental property and the month and year places service is gonna be zero six two zero one seven like that and the basis like I said it's gonna be two hundred thousand like that and since he put this in service in June he's gonna select June right here so that he'll give him some de creation of thirty nine forty and if he goes back up here to his Schedule E a thirty nine forty came in right there so his total expenses are 11 for 40 and his income is 12 so his net income here is five hundred and sixty dollars which is a total that we here we see coming down here on line 26 which is correct so that is the amount that would go to 1040 line 17 so that is it that's how Schedule E works if you have a rental property thanks for listening.

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