Real Estate Tax – How to Report Rental Income for Taxes
If a taxpayer rents apartments, buildings or rooms, and also provides heat and light, and garbabe collection and other property management services, he normally reports rental income and expenses on Part 1 of Schedule E (Form 1040). Property that is not for profit is not included on Shedule E.
When completing Schedule E to report rental income, one must make sure that all the required information is entered such as property address of the rental and the type of property on line one. One line 2, one must enter the number of days that each of your property was rented at fair market value, if the property was used for personal use this must be entered as well.
If the taxpayer provided services such as a maid service or a regular cleaning service, which is for the tenants convenience, reports the rental income and expenses on line C of form 1040, Profit or Loss from Business or Schedule C-EZ. Servies such as providing heat and light, cleaning of public areas, trash collection, are not considered significant services. If the taxpayer provides these services he may also have to pay self employment tax on his rental income.
