Changes to the 2018 Instructions for Schedule E (Form) due to the Taxpayer Certainty and Disaster Tax Relief Act of 2019

 

The Taxpayer Certainty and Disaster Tax Relief Act of 2019 included retroactive tax relief for tax year 2018. The 2018 Instructions for Schedule E (Form 1040) are not being revised at this time. Instead, make the following substitution when using these 2018 instructions.

  1. 2018 Instructions for Schedule E, Exception for Certain Rental Real Estate Activities. In the instructions for passive activity losses (under Passive Activity Loss Rules in the General Instructions), replace the paragraph with the heading Modified adjusted gross income with the following.

"Modified adjusted gross income. This is your adjusted gross income from Form 1040, line 7, or Form 1040NR, line 35, without taking into account:

  • Any allowable passive activity loss,
  • Rental real estate losses allowed for real estate professionals (see Activities of real estate professionals, earlier),
  • Taxable social security or tier 1 railroad retirement benefits,
  • Deductible contributions to a traditional IRA or certain other qualified retirement plans under section 219,
  • The student loan interest deduction,
  • The domestic production activities deduction,
  • The tuition and fees deduction,
  • The deduction for one-half of self-employment tax,
  • The exclusion from income of interest from series EE and I U.S. savings bonds used to pay higher education expenses, and
  • Any excluded amounts under an employer's adoption assistance program."

If the retroactive tax relief provided by The Taxpayer Certainty and Disaster Tax Relief Act of 2019 impacts your 2018 tax return, you can find more information about amending a tax return at IRS.gov/form1040x.