Instructions For Schedule C 1040 - 2016 (Page 13 of 18) in pdf

square feet (300 square feet for January

amounts you figured on your Forms

a farm commodity as part of your farm-

through July divided by the number of

8829, and then enter the total on line 30

ing business, your deductible loss from

months in the year ((300 +300 +300 +

of the Schedule C you are filing for that

that activity may be limited if you re-

300 + 300 + 300 + 300 + 0 + 0 + 0 + 0 +

business.

ceived certain subsidies. See the Instruc-

0)/12)). Donna also prepared Form 8829

tions for Schedule F for details on any

Line 31

to deduct the actual expenses associated

applicable subsidy. Use one of the work-

with the qualified business use of her

sheets in the Schedule F instructions to

Figuring your net profit or allowable

new home.

determine if you have an excess farm

loss. If your expenses (including the ex-

loss. See the Instructions for Schedule F

Once you have determined your al-

penses you report on line 30) are more

for more details on how to complete the

lowable square footage, enter the result

than your gross income, do not enter

worksheets.

on line 2 of the Simplified Method

your loss on line 31 until you have ap-

Worksheet.

You must figure and apply your ex-

plied the excess farm loss rules, the

cess farm loss before figuring any limi-

If you moved during the year,

at-risk rules, and the passive activity

tations to your loss due to the at-risk

your average allowable square

loss rules. To apply these rules, follow

rules or the passive activity loss rules.

footage will generally be less

the instructions in

Excess farm loss

CAUTION

Reduce your loss by your excess farm

than 300.

rules,

Line

32, and the Instructions for

loss before applying the at-risk rules and

Form 8582. After applying those rules,

passive activity loss rules.

You can use the Area Adjust-

the amount on line 31 will be your al-

ment Worksheet in Pub. 587 to

TIP

Reporting your net profit or allowable

lowable loss, and it may be smaller than

help you determine the allowa-

loss. Once you have figured your net

the amount you figured by subtracting

ble square footage to enter on line 2 of

profit or allowable loss, report it as fol-

line 30 from line 29.

the Simplified Method Worksheet.

lows.

If your gross income is more than

your expenses (including the expenses

Individuals. Enter your net profit or

Reporting your expenses for business

you report on line 30), and you do not

allowable loss on line 31 and include it

use of the home. If you did not use the

have prior year unallowed passive activ-

simplified method, include the amount

on Form 1040, line 12. Also, include

ity losses, subtract line 30 from line 29.

your net profit or allowable loss on

from line 35 of Form 8829 on line 30 of

The result is your net profit.

Schedule SE, line 2. However, if you are

the Schedule C you are filing for that

a statutory employee or notary public,

business.

If your gross income is more than

see

Statutory employees

Notary pub-

your expenses (including the expenses

If you used the simplified method. If

lic, later.

you report on line 30), and you have pri-

you elect to use the simplified method

or year unallowed passive activity los-

Nonresident aliens. Enter your net

for the business use of a home, complete

ses, do not enter your net profit on

profit or allowable loss on line 31 and

the additional entry spaces on line 30 for

line 31 until you have figured the

that home only. Include the amount

include it on Form 1040NR, line 13.

amount of prior year unallowed passive

You should also include this amount on

from line 5 of the Simplified Method

activity losses you may claim this year

Schedule SE, line 2 if you are covered

Worksheet on line 30.

for this activity. Use Form 8582 to fig-

under the U.S. social security system

If you itemize your deductions on

ure the amount of prior year unallowed

due to an international social security

Schedule A, you may deduct your mort-

passive activity losses you may include

agreement currently in effect. See the

gage interest, real estate taxes, and casu-

on line 31. Make sure to indicate that

Instructions for Schedule SE for infor-

alty losses on Schedule A as if you did

you are including prior year passive ac-

mation on international social security

not use your home for business. You

tivity losses by entering "PAL" to the

agreements. However, if you are a statu-

cannot deduct any excess mortgage in-

left of the entry space.

tory employee or notary public, see

Stat-

terest or excess casualty losses on

If you checked the "No" box on line

utory employees

Notary

public, later.

Schedule C for this home.

G, see the Instructions for Form 8582;

Trusts and estates. Enter the net

Use Part II of Schedule C to deduct

you may need to include information

profit or allowable loss on line 31 and

business expenses that are unrelated to

from this schedule on that form, even if

include it on Form 1041, line 3.

the qualified business use of the home

you have a net profit.

(for example, expenses for advertising,

Statutory employees. Enter your net

Rental real estate activity. Unless

wages, or supplies, or depreciation of

profit or allowable loss on line 31 and

you are a qualifying real estate profes-

equipment or furniture).

include it on Form 1040, line 12, or on

sional, a rental real estate activity is a

Deduction

figured

multiple

Form 1040NR, line 13. However, do not

passive activity, even if you materially

report this amount on Schedule SE,

forms. If you used more than one home

participated in the activity. If you have a

line 2. If you were a statutory employee

for a business during the year, you may

loss, you may need to file Form 8582 to

and you are required to file Schedule SE

use a Form 8829 for each home or you

figure your allowable loss. See the In-

because of other self-employment in-

may use the simplified method for one

structions for Form 8582.

come, see the Instructions for Sched-

home and Form 8829 for any other

Excess farm loss rules.

If your

home. Combine the amount you figured

ule SE.

Schedule C activity includes processing

using the simplified method and the

C-13

Instructions For Schedule C 1040 - 2016 Page 13

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