Marie Posted February 16, 2013 Report Share Posted February 16, 2013 2011 software gave EIC to client that had over $3200 of real estate rental which he participated in. 2012 won't, it counts it as investment income, no EIC. Which year is right? All numbers on the schedule of both years were punched in identical. Quote Link to comment Share on other sites More sharing options...
jainen Posted February 16, 2013 Report Share Posted February 16, 2013 >>it counts it as According to the Instructions for Form 1040, investment income for EIC is the sum of Lines 8a, 8b, 9a, and 13. Quote Link to comment Share on other sites More sharing options...
joanmcq Posted February 16, 2013 Report Share Posted February 16, 2013 Net or gross income? Quote Link to comment Share on other sites More sharing options...
mcb39 Posted February 17, 2013 Report Share Posted February 17, 2013 My understanding has always been that it is investment income. In 2011 and prior years there was a box to check at the top which eliminated it from qualifying for income for EIC. Have not looked at the Sch E yet this year, but under the rules for EIC, Investment income includes net income from nonbusiness rents and royalties. This is from Quickfinder Page 12-7 and has also always been my understanding. Quote Link to comment Share on other sites More sharing options...
joanmcq Posted February 17, 2013 Report Share Posted February 17, 2013 Yes, but for rentals, it's net rental income, not gross. Won on an audit with that too, by going through the EIC investment income worksheet & instructions. 1 Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted February 17, 2013 Report Share Posted February 17, 2013 Agree with Joan. Quote Link to comment Share on other sites More sharing options...
mcb39 Posted February 17, 2013 Report Share Posted February 17, 2013 I guess I should have highlighted the line in my post that clearly states Net income from nonbusiness rentals and royalties. Some of my clients are running out of deductions on their rentals and beginning to show a net profit high enough to disqualify them from EIC. Quote Link to comment Share on other sites More sharing options...
Marie Posted February 17, 2013 Author Report Share Posted February 17, 2013 This rental income is from rental of farmground that client and his brother use on their farm. Client's farmground is used in a dairy operation, the operation is run by client and brother, so brother pays rent to my client to compensate for using my clients'ground. In 2011 it was not considered inv income, but in 2012 it is. The rental mount goes to the worksheet for investment income. I check the 2011, and that amount did not go to the worksheet. As far as I can tell, I've "Xed" all the same boxes. Quote Link to comment Share on other sites More sharing options...
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