Instructions For Schedule C (2015) (Page 13 of 18) in pdf

You can use the Area Adjust-

the amount on line 31 will be your al-

Reporting your net profit or allowable

ment Worksheet in Pub. 587 to

lowable loss, and it may be smaller than

TIP

loss. Once you have figured your net

help you determine the allowa-

the amount you figured by subtracting

profit or allowable loss, report it as fol-

ble square footage to enter on line 2 of

line 30 from line 29.

lows.

the Simplified Method Worksheet.

If your gross income is more than

Individuals. Enter your net profit or

your expenses (including the expenses

Reporting your expenses for business

allowable loss on line 31 and include it

you report on line 30), and you do not

use of the home. If you did not use the

on Form 1040, line 12. Also, include

have prior year unallowed passive activ-

simplified method, include the amount

your net profit or allowable loss on

ity losses, subtract line 30 from line 29.

from line 35 of Form 8829 on line 30 of

Schedule SE, line 2. However, if you are

The result is your net profit.

the Schedule C you are filing for that

a statutory employee or notary public,

If your gross income is more than

business.

see

Statutory employees

Notary pub-

your expenses (including the expenses

lic, later.

If you used the simplified method. If

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

you elect to use the simplified method

Nonresident aliens. Enter your net

or year unallowed passive activity los-

for the business use of a home, complete

profit or allowable loss on line 31 and

ses, do not enter your net profit on

the additional entry spaces on line 30 for

include it on Form 1040NR, line 13.

line 31 until you have figured the

that home only. Include the amount

You should also include this amount on

amount of prior year unallowed passive

from line 5 of the Simplified Method

Schedule SE, line 2 if you are covered

activity losses you may claim this year

Worksheet on line 30.

under the U.S. social security system

for this activity. Use Form 8582 to fig-

due to an international social security

ure the amount of prior year unallowed

If you itemize your deductions on

agreement currently in effect. See the

passive activity losses you may include

Schedule A, you may deduct your mort-

Instructions for Schedule SE for infor-

on line 31. Make sure to indicate that

gage interest, real estate taxes, and casu-

mation on international social security

alty losses on Schedule A as if you did

you are including prior year passive ac-

agreements. However, if you are a statu-

tivity losses by entering "PAL" to the

not use your home for business. You

tory employee or notary public, see

Stat-

left of the entry space.

cannot deduct any excess mortgage in-

utory employees

Notary

public, later.

terest or excess casualty losses on

If you checked the "No" box on line

Schedule C for this home.

G, see the Instructions for Form 8582;

Trusts and estates. Enter the net

you may need to include information

Use Part II of Schedule C to deduct

profit or allowable loss on line 31 and

from this schedule on that form, even if

business expenses that are unrelated to

include it on Form 1041, line 3.

the qualified business use of the home

you have a net profit.

Statutory employees. Enter your net

(for example, expenses for advertising,

Rental real estate activity. Unless

profit or allowable loss on line 31 and

wages, or supplies, or depreciation of

you are a qualifying real estate profes-

include it on Form 1040, line 12, or on

equipment or furniture).

sional, a rental real estate activity is a

Form 1040NR, line 13. However, do not

passive activity, even if you materially

Deduction

figured

multiple

report this amount on Schedule SE,

participated in the activity. If you have a

forms. If you used more than one home

line 2. If you were a statutory employee

loss, you may need to file Form 8582 to

for a business during the year, you may

and you are required to file Schedule SE

figure your allowable loss. See the In-

use a Form 8829 for each home or you

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

ule SE.

Excess farm loss rules.

If your

home. Combine the amount you figured

Schedule C activity includes processing

Notary public. Do not enter your net

using the simplified method and the

a farm commodity as part of your farm-

profit from line 31 on Schedule SE,

amounts you figured on your Forms

ing business, your deductible loss from

line 2, unless you are required to file

8829, and then enter the total on line 30

that activity may be limited if you re-

Schedule SE because you have other

of the Schedule C you are filing for that

ceived certain subsidies. See the Instruc-

self-employment income. See the In-

business.

tions for Schedule F for details on any

structions for Schedule SE.

applicable subsidy. Use one of the work-

Line 31

Community income. If you and your

sheets in the Schedule F instructions to

spouse had community income and are

determine if you have an excess farm

Figuring your net profit or allowable

filing separate returns, see the Instruc-

loss. See the Instructions for Schedule F

loss. If your expenses (including the ex-

tions for Schedule SE before figuring

for more details on how to complete the

penses you report on line 30) are more

self-employment tax.

worksheets.

than your gross income, do not enter

Earned income credit. If you have a

your loss on line 31 until you have ap-

You must figure and apply your ex-

net profit on line 31, this amount is

plied the excess farm loss rules, the

cess farm loss before figuring any limi-

earned income and may qualify you for

at-risk rules, and the passive activity

tations to your loss due to the at-risk

the earned income credit (EIC).

loss rules. To apply these rules, follow

rules or the passive activity loss rules.

the instructions in

Excess farm loss

Reduce your loss by your excess farm

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.

C-13

Instructions For Schedule C (2015) Page 13

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