Is rental income always reportable to the IRS?
Do you always need to report your rental income?
If you rent your home to others, you usually must report the rental income on your tax return. In most cases, you can deduct the costs of renting your property. However, your deduction may be limited if you also use the property as your home. If you are renting your apartment, house, etc., here is some basic tax information that you should know:
Schedule E. You usually report rental income and rental expenses on Schedule E Supplemental Income and Loss. Your rental income may also be subject to Net Investment Income Tax.
Used as a Home. If the property is “used as a home,” your rental expense deduction is limited. This means your deduction for rental expenses can’t be more than the rent you received. For more about these rules, see Publication 527.
Divide Expenses. If you personally use your property and also rent it to others, special rules apply. You must divide your expenses between the rental use and the personal use. To figure how to divide your costs, you must compare the number of days for each type of use with the total days of use.
Personal Use. Personal use includes not only use by your family, but also use by anyone who pays less than a fair rental price.
Rented Less than 15 Days. If the property is “used as a home” and you rent it out fewer than 15 days per year, you do not have to report the rental income.
If you have questions about rental income and 1031 Like Kind Exchanges, book your free consultation today with Capital Protection Alliance Trusted Tax Advisor at http://capitalproalliance.com/helpstep1_individual_tax/