Special Articles

Fact Sheet on Rental Income and Expenses

By Peter Jason Riley

As the owner of rental real property, it is important that you are aware of everything that counts as income so that you do not face underpayment tax penalties. It is also important that you are aware of all deductible expenses so that you do not overpay your taxes. This letter highlights some of the tax rules applicable to you as a landlord.

If you rent property that you also use as a residence, such as a vacation home, special rules apply. If the property is rented for fewer than 15 days during the tax year, you are not required to include the rent you receive as income. However, you are also not permitted to deduct expenses associated with the rental.

However, if you rent such a property for more than 14 days during the tax year, deductible expenses must be calculated based on the number of days the property is used for each purpose.

If you have any questions regarding the deductions to which you are entitled to as a landlord, or if you are interested in discussing other ways in which to minimize your taxes, please feel free to contact our office at your earliest convenience.

See Rental Real Estate Deductions for more info.


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