Rental Property Questions

Forum|Forum|1 year ago
March 25, 2025
2 replies
0 views

Hello,

We purchased a townhome in 2024 to rent out. I have several questions related to this:

1. We didn't start a separate business to acquire this property so we would file under our own name for business?

2. We hired a management company which gave us a 1099 MISC for the income received. This part confuses me. Do I need to report this under my personal income because of the 1099 MISC form? If so, is it possible to report the renovation, management company fees, and other expenses somehow?

Thank you in advance for your help! I may have many follow-up questions as well. 🙂

Best answer by AnnetteB6

You're so encouraging. Thank you! But now I'm stuck again. 😞

When I add, add Asset, I chose Real Estate Property. But my only 3 options thereafter are: Nonresidential, Qualified Improvement, and Specific Qualified. Which one do I choose and how do I indicate that this is the first year purchase of this residential property for rental purposes?

Be sure that you are in the Rental Properties and Royalties section instead of the Business Income and Expenses section. Based on the description of the choices you are seeing on the screen, you seem to be in the wrong place.

Unless you are providing personal services to your renters, you do not report rental income and expenses on Schedule C (the Business Income and Expenses section). You should be reporting it on Schedule E (the Rental Properties and Royalties section).

Here is a screenshot from TurboTax Home and Business for visual reference:

As you start going through the Rental Income and Expenses section, many of your questions will probably be answered. But, feel free to ask here as well.

@ssyw

PatriciaV

Employee

1) Yes, you can report this rental activity on your personal tax return. This information is entered under Rental Properties and Royalties, which results in Schedule E being added to your return.

2) Form 1099-MISC represents your rental income, which is entered in the Rental Income section and not under the 1099-MISC topic.

3) Yes, you should report all related Rental Expenses, including the management fees. Any renovations that improved the property would be reported under Assets/Depreciation as a separate entry from the residence itself.

Additional Information:

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

ssywAuthor

That is very helpful. Thank you so much!

jimro

Residential Rental Property can be reported on Schedule E in accordance with IRS Pub 527. On Schedule E you will report rental income, as well as deductions for management fees, insurance, mortgage interest, depreciation, taxes, supplies, repairs, HOA fees, assessments, and other expenses.

AmyC

Employee

Most landlords use Sch E but sch C is required sometimes. Topic no. 414, Rental income and expenses states:

if you provide substantial services that are primarily for your tenant's convenience, report your income and expenses on Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship).
Report income and expenses related to personal property rentals on Schedule C (Form 1040) PDF, if you're in the business of renting personal property.

@jimro

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"