Necessary Tax Forms for Reporting Rental Activity

For a landlord, to correctly account for and report your annual rental property revenue to the IRS, you must have a variety of different Revenue Service tax forms which you’ll find are highlighted within this article. As is laid out directly below, the tax documents change based on the particular official organization who owns the rental (individual, partnership, corporation, or LLC). For additional info regarding legal entity ownership, look at the article found in this Guide, titled Best Rental Property Ownership.

Quick Note: You can obtain the different documents outlined in the next paragraphs on the IRS’s webpage: The needed documents will undoubtedly be included in any tax preparation software programs, if you’re using one.

Individual Ownership

Shared rental property ownership with a wife or husband, mutual tenancy with right of survivorship, as well as tenancy in common would be examples. All individual taxpayers will have to file Form 1040, and that is exactly where you need to start. At line 17 of the first page of Form 1040 will be the total rental property earnings or deficit, subjected to taxes. You are not allowed to take advantage of simple Forms 1040A or 1040-EZ, as a landlord with leasing income and expenses.

Schedule E. Schedule E is a certain addendum of Form 1040. Of this addendum’s many uses, only the usage of reporting rental income and expenses is useful to you. The section of Schedule E labeled as “Part I” is the one section you should fill in. A handful of fundamental notes to keep in mind: while reporting on the rental property you mutually own with another person, other than your wife or husband, you will only need to report the expenditures that you accrued and the earnings you collected. Also, do not forget that if you rented for only a portion of the entire year, or if you have been leasing part of your home, you will have to allocate expenses concerning rental and non-rental purposes. For additional tips, look at Tax Deductible Rental Property Expenses, the article collection that’s included within this Guide.

Form 4562. At line 18 of Schedule E, you will deduct the depreciation on your rental, which you’ll fill out Form 4562 to calculate. View the article entitled Depreciation Expenses for Rental Property, in this Guide, to get more details.

Partnership/Corporate Ownership

A general or limited partnership, or S corporation is included.

Form 1065/1120-S. The document a collaboration utilizes to report every one of its company activities is Form 1065, that you have to use when you have a partnership. An S corporation utilizes Form 1120-S to report its enterprise operations. Schedule K, line 2 of Form 1065 or 1120-S is the place your own total rental property losses or revenue will be reported (Schedule K is embedded within the documents).

Form 8825. This form acts like Schedule E, but is for partnerships and S corporations. It’s in essence very similar to Schedule E. Always report entire sums of any revenue and operating costs incurred by the partnership or corporation (they are allotted to each partner or investor later on).

Schedule K-1. The total rental profits or loss due to each shareholder or business partner is reported by this form, in accordance with the ownership interest of each investor or business partner. The elements of the K-1 received by each partner has to be reported on their own Form 1040, Schedule E, Part II.

Limited Liability Co-ownership

You can file like you’re an independent owner on the grounds that, for taxation uses, a single-member LLC is actually a disregarded entity (notice above). A multiple-member LLC may choose to be taxed as a partnership or as an S corporation (look above).

Seattle 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.

About the author

Seattle CPA+John Huddleston has written extensively on tax related subjects of interest to small business owners. Since 2002, he has owned his own small business, Huddleston Tax CPAs. He is a graduate of Washington State University and the University of Washington School of Law.