Rule 5. Your Investment Income Must Be $2,400 or Less You cannot claim the earned income credit unless your investmentincome is $2,400 or less. If your investment income is more than$2,400, you cannot claim the credit. Form 1040EZ.If you file Form 1040EZ, your investment income is the total of theamounts on line 2 and any tax-exempt interest you wrote in the spaceto the right of the words "Form 1040EZ" on line 2 of that form. Form 1040A.accommodation in HamburgIf you file Form 1040A, your investment income is the total of theamounts on lines 8a (taxable interest), 8b (tax-exempt interest), 9(ordinary dividends), and 10 (capital gain distributions) of thatform. Form 1040.If you file Form 1040, use Worksheet 1, below, to figureyour investment income. Worksheet 1:ERROR MSG Investment Income If You Are FilingForm 1040 Interest andDividends  1. Enter any amount from Form 1040,line 8a.  1.  2. Enter any amount from Form 1040, line 8b, plusany amount on Form 8814, line 1b.  2.  3. Enter any amount from Form 1040, line 9.  3.  4. Enter the amount from Form 1040, line 21, thatis from Form 8814 if you are filing that form to report your child'sinterest and dividend income on your return. (See instructions belowfor line 4 if your child received an Alaska Permanent Funddividend.) 4. Capital Gain NetIncome  5. Enter the amount from Form 1040, line 13. If theamount on that line is a loss, enter zero.  5.  6. Enter any gain from Form 4797, Sales of Business Property, line 7, column (g). If the amount on thatline is a loss, enter zero. (But, if you completed lines 8 and 9 ofForm 4797, enter the amount from line9, column (g) instead.)  6.  7. Subtract line 6 of this worksheet from line 5 ofthis worksheet. (If the result is less than zero, enter zero.)  7. Royalties and RentalIncome from Personal Property  8. Enter any royalty income from Schedule E, line4, plus any income from the rental of personal property shown on Form1040, line 21.  8.  9. Enter any expenses from Schedule E, line 21,related to royalty income, plus any expenses from the rental ofpersonal property deducted on Form 1040, line 32. 9. 10. Subtract the amount on line 9 of this worksheetfrom the amount on line 8. (If the result is less than zero, enterzero.) 10. Passive Activities 11. Enter the total of anynet income from passiveactivities (included on Schedule E, lines 26, 28a (col. (h)), 33a(col. (d)), and 39). (See instructions below for lines 11 and 12.) 11. 12. ERROR MSGEnter the total of any losses from passiveactivities (included on Schedule E, lines 26, 28b (col. (g)), 33b(col. (c)), and 39). (See instructions below for lines 11 and 12.) 12. 13. Combine the amounts on lines 11 and 12 of thisworksheet. (If the result is less than zero, enter zero.) 13. 14. Oslo hotelsAdd the amounts on lines 1, 2, 3, 4, 7, 10, and13. Enter the total. Izola luxuriose SuitenThis is your Investment Income. 14. Instructions for line4. To figure the amount to enter on line 4, start with theamount on line 6 of Form 8814. Multiply that amount by a percentagethat is equal to any Alaska Permanent Fund dividends divided by thetotal amount of interest and dividend income on line 4 of Form 8814.Subtract the result from the amount on line 6 of Form 8814. Example. Your 10-year old child has interest anddividend income of $4,000, including $500 in Alaska Permanent Funddividends. Youchoose to report this on your return. You enter $4,000 on line 4 ofForm 8814 and $2,600 on line 6 of Form 8814 and line 21 of Form 1040.You figure the amount to enter on line 4 of this worksheet as follows: $2,600 - ($2,600 ($500 $4,000)) = $2,275 Instructions for lines 11 and 12. In figuring theamount to enter on lines 11 and 12, do not take into account anyroyalty income (or loss) included on line 26 of Schedule Eor any amount included in your taxableearned income. To find out if the income on line 26 or line 39 ofSchedule E is from a passive activity,see the Schedule Einstructions. If any of the rental real estate income (or loss)included on Schedule E, line 26, is not from a passive activity, print"NPA" and the amount of that income (or loss) on the dotted linenext to line 26.