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U.S. Taxes and Rental Real Estate Income
Rating: 4.4 out of 5(16 ratings)
48 students

U.S. Taxes and Rental Real Estate Income

Learn the U.S. federal tax rules and reporting requirements for your rental properties
Created byJason Knott
Last updated 6/2021
English

What you'll learn

  • Learn the U.S. federal tax rules related to rental real estate income
  • Learn what constitutes rental income and what expenses are deductible
  • Learn how to compute depreciation expense for your property
  • Learn how to report the income and expenses on a federal tax return
  • Learn the passive activity loss rules that apply to rental activities

Course content

1 section • 8 lectures • 1h 9m total length

  • Introduction3:55

    The course will cover the following topics:


    1. What is rental real estate income

    2. What deductions are allowed for federal tax purposes

    3. How to calculate depreciation expense

    4. Federal tax accounting example

    5. Reporting on federal tax returns

    6. Passive activity loss (PAL) limitations and exceptions

    7. Form 1099 reporting

  • What is Rental Real Estate Income5:27
  • What Deductions are Allowed for Federal Tax Purposes7:30

    Discover which deductions are allowed for rental real estate, including advertising, cleaning, repairs and maintenance, insurance, management fees, mortgage interest, taxes, depreciation rules, and pro-rated adjustments for personal use.

  • How to Calculate Depreciation Expense6:33

    Learn how depreciation expense provides a deduction to recover building cost over 27.5 years for residential rentals, with depreciation beginning in service and land not depreciable.

  • Tax Accounting Example of a Rental Real Estate Property9:23

    Examine how book income differs from federal taxable income in rental real estate, focusing on mortgage interest vs principal, depreciation, and amortization, with a practical Excel example.

  • Reporting on Federal Income Tax Returns15:41

    Discover how rental real estate income is reported on federal tax returns, using Schedule E for individuals, Schedule C for single-owner LLCs, and Form 1065/8825 or Form 1120 for entities.

  • Passive Activity Loss (PAL) Limitations and Exceptions16:07

    Explore passive activity loss rules for rental real estate, including active participation and real estate professional elections, with 750 hours, AGI thresholds, up to 25,000 deduction, and audit risks.

  • Form 1099 Reporting for Vendors5:17

Requirements

  • A basic understanding of the rental real estate sector and U.S. federal tax rules

Description

This course is designed to give individual real estate investors the knowledge to comply with U.S. federal tax rules for their real property investments.  Many real estate investors are familiar with how to track their income and expenses for accounting purposes, but they are not familiar with the particular federal tax rules on what needs to be reported and which expenses are eligible for a deduction.  The IRS also has very specific rules surrounding when a real estate investor can deduct losses on their tax return, so we will cover those issues as well.

The topics covered within the guide include the following:

1. What constitutes rental real estate income under federal tax rules?  Is it cash, property, crypto, etc?

2. What are common expenses for a rental property.  Which amounts are tax-deductible under federal tax rules?

3. How does the owner calculate depreciation expense for the property.  When does depreciation start, and which pieces of the property are not depreciable assets?

4. The guide includes an example of accounting for income and expenses using federal tax rules.

5. What are the passive activity loss (PAL) rules for investors and what are some exceptions?

6. What are the IRS Form 1099 reporting obligations for rental businesses?


Who this course is for:

  • Current real estate investors & individuals looking to enter the real estate investing space

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