Reporting Rental Income and Expenses
At Wasvary Tax services we can help you report rental income.
Rental income and expenses are generally reported on Schedule E, Supplemental Income and Loss. Rental income must be reported in the same year in which it is received. If you do not rent your property to make a profit, you can only deduct your rental expenses up to the amount of rental income. If you rent part of your property, that must be separated from property used for personal purposes. The IRS website has more information on reporting rental income and expenses, as well as special tax rules that apply to condominium owners and rent paid for cooperatives.
Rental income can include the following payments:
- rent paid and advance rent payments (such as first and last month’s rent)
- security deposits not returned to the tenant
- payment for canceling a lease
- rental expenses paid by tenant in lieu of rent
- property or services you receive in lieu of rent, at fair market value