How to Claim Deductions for Rental Properties

Filing Taxes

A taxpayer may deduct expenses related to rental properties. If a taxpayer has rental income, they must file Form 1040 Schedule E, which covers income from rental property, not personal property. A taxpayer may claim personal property rental income on Form 1040. Generally, any expenses related to producing income from a rental property will offset rental income.

Things You'll Need

• Form 1040 Schedule E

Instructions

1. Collect all receipts related to rental property. This includes, but is not limited to, receipts from advertising, legal fees, mortgage payments, repairs, supplies and utilities.

2. Enter the amount of rent received on Line 3 of Form 1040 Schedule E.

3. List each expense on Form 1040 Schedule E Lines 5 through 18. Lines 5 through 17 are listed expenses, and Line 18 is other expenses. Other expenses are any expenses related to the rental of the property or to the property not covered in Lines 5 through 17.

4. Determine depreciation of the rental property by using IRS Form 4562. Enter this amount on Line 20 of Form 1040 Schedule E.

References

• IRS: Form 1040 Schedule E
• IRS: Form 1040 Schedule E Instructions
• IRS: Publication 527 (2009)
• IRS: Tax Topics 414 Rental Income and Expense
• IRS: Rental Income and Expenses - Real Estate Tax Tips