Jackson Hewitt® is here to help you understand complex tax laws so you can be better informed and take full advantage of tax law provisions.
These topics explore some of the more important aspects of complicated tax laws, in a manner that is understandable and concise.
If you own rental real estate, you should know how it impacts your personal tax return. Rental income must be reported on your tax return, and generally, associated expenses can be deducted from your rental income. Reviewing answers to the following common questions regarding rental property may help you understand the
tax implications of rental property ownership:
your neighborhood Jackson Hewitt office for more information or assistance. Use the Office Locator feature available on this Web site or call 1-800-234-1040 to find the Jackson Hewitt location most convenient to you.
Rental income is any income you receive for the use or occupancy of property you own. Some examples are:
Deductible expenses for rental property are the ordinary and necessary expenses to manage, conserve, and maintain your property. Deductible expenses include:
If you rent only part of your property, certain expenses must be divided between the part used as rental property and the part used for personal purposes.
If you do not rent your property for profit, you can deduct your rental expenses only up to the amount of your rental income.
When rental property is sold, the resulting gain or loss is treated as ordinary or capital, depending on the circumstances.
The rental of personal property such as equipment or vehicles is reported as business income. You are in the business of renting personal property if the primary purpose for renting the property is income or profit and you are involved in the activity on a continuous and regular basis. If your rental of personal property
is not a business, other rules for reporting will apply.
Deductible losses from residential rental properties are subject to certain limitations. If you are considered a real estate professional, special rules apply for the reporting of income and losses. For more information, contact your neighborhood Jackson
Hewitt Tax Service office.