Rental Income and Expenses

Understand the tax implications of rental income and the associated expenses with our comprehensive guide. This resource explains what qualifies as rental income, including advance rent, payment for canceling a lease, and property or services received in lieu of rent. It also covers deductible rental expenses, such as repairs, maintenance, and depreciation, providing essential information for landlords to manage their rental properties’ financial aspects effectively.

Highlights:

• Types of Rental Income: Includes payments like advance rent, lease cancellation fees, and the fair market value of property or services received.

• Deductible Expenses: Guidelines for deducting ordinary and necessary expenses, including repairs, insurance, and local transportation.

• Depreciation: Information on when to start depreciating rental property and the impact of improvements versus repairs.

• Security Deposits: Tax treatment of security deposits based on their intended use, such as refundable deposits or advance rent.

• Vacant Property Expenses: Deductions allowed for expenses incurred when a property is available for rent but not yet occupied.