NOTE: The different documents mentioned here can be located on the Revenue Service’s webpage, at: http://www.irs.gov/Forms-&-Pubs. If you use tax preparing software, the program will have each of the needed forms.

Individual Ownership

Such as joint rental property ownership with a husband or wife, tenancy in common, or mutual tenancy with legal rights of survivorship.

Form 1040. All independent citizens will have to use Form 1040, and this is where you should begin. Your own total rental profits or losses subjected to tax are on line 17 on the first page of Form 1040. Keep in mind that as a good landlord with leasing income and expenses, you are not allowed to utilize the simplified Forms 1040A or 1040-EZ.

Schedule E. Schedule E is one addendum to Form 1040. It has a variety of usages, yet the application that is meant for yourself is reporting of leasing earnings and costs. The one element of Schedule E that you have to finish is the section labeled as “Part I”. Several important notes to bear in mind: if you happen to own the rental jointly with someone other than your wife or husband, report just the earnings which you gained along with the expenditures that you sustained. Bear in mind, additionally, that you have to allocate expenditures regarding rental and non-rental use should you be renting a part of your house, or whenever you rented only for a part of the calendar year. For more details, see Tax Deductible Rental Property Expenses, the article series which is provided within this Guide.

Form 4562. Form 4562 is employed to calculate depreciation of your property, that you can deduct at line 18 of Schedule E. See the article titled Depreciation Expenses for Rental Property, found inside this Guide, to get more advice.

Partnership/Corporate Ownership

For example a general or limited partnership, or S corporation.

Form 1065/1120-S. The form a partnership employs to report each of its business activities is Form 1065, that you will need to fill out if you’ve got a partnership. Form 1120-S is used by an S corporation to report business operations. Schedule K, line 2 of Form 1065 or 1120-S the place your own total rental loss or profits will be reported (These forms are integrated with Schedule K).

Form 8825. This form acts just like Schedule E, except that it’s for partnerships and S corporations. Schedule E and Form 8852 are basically similar. Be sure to include complete amounts of any profits and operating costs sustained by the partnership or corporation (Later, these are divided among each shareholder or partner).

Schedule K-1. The total rental property profit or financial loss owing to each shareholder or business partner is reported by this tax form, according to the property ownership interest of the investor or business partner. The details of the K-1 sent to every partner needs to be reported on his / her Form 1040, Schedule E, Part II.

Limited Liability Co-ownership

A one member limited liability company is really a disregarded entity for taxation requirements, which means you could file as if you’re an individual owner (look above). A multiple-member LLC may choose to be taxed as either a partnership or as an S corporation (see above).

Huddleston CPA +John Huddleston has written extensively on tax related subjects of interest to small business owners. He is a graduate of Washington State University and the University of Washington School of Law.