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Financial Planning / Tax Strategies
|Subject: Re: Rental Property||Date: 1/21/2000 3:16 PM|
|Author: Taxslave||Number: 25685 of 121252|
You will need to fill out a Schedule E to file with your Form 1040. On the Schedule E you will report the income and expenses related to your rental activity.
A portion of your mortgage interest and property taxes should be allocated to your Schedule E. The remainder of these expenses would be reported on your Schedule A. I would suggest that you use the relative square footage of the space rented to your friends as the basis for the allocation. You should also determine the portion of the expenses to be allocated based on the number of months your friends were tenants.
Any other expenses you incurred as a direct result of your rental activity will also be deductible.
You should take your basis in your home (cost + improvements) and depreciate the portion of home allocable to rental activities over 27.5 years.
The following is a link to PUB. 527 Residential Rental Property on the IRS's website.
If you want to download the PDF version of the publication and print it out use this link.
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