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What is the easiest way to report my rental income and expense?

Real Estate Rental Income
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Tax Professional Answers

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Harold Goedde
Use Schedule E for form 1040
Leave a Comment 169 weeks ago

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Shirley (Suitao) Yang
Please notice that all rental income includes advance rental payment, must be reported on your current year income tax return as a gross income when you received and/or earned it, and the associated rental expenses may be deducted from rental income.

You normally report and list your total rental income and expenses on Form 1040, Schedule E, Part I for current tax year. Please also maintain good records and evidences for rental activities, including the canceled checks, receipts, and bills to support your income and expenses.

Please be aware that if you received a security deposit and plan to return it at the end of the lease, then this deposit need not be reported as an income. If you received property or services as rent, then the fair market value of the property or services must be reported as your rental income.

As I mentioned above you may deduct your rental expenses from rental income. There are deductible rental expenses and non-deductible expenses:

(1) Deductible rental expenses are the ordinary and necessary expenses, which may include mortgage interest, utilities and insurance expenses, and property tax, and depreciation, and repairs.

(2) Non-deductible rental expenses are capital improvements that adding value to the rental property, like installing a new heater or adding a new bed. Such costs cannot be deducted as current year expenses on your income tax return.
Leave a Comment 169 weeks ago

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