In short

Tax support for rental owners and real estate businesses organises the items that drive the return: income and expenses per property, depreciation schedules with the basis and placed-in-service date of each building and improvement, records of repairs versus improvements, mortgage interest and property tax statements, and the dates and figures for any purchase or sale so a preparer can calculate gain or loss.

Rental property returns are mostly built from schedules: income and expenses by property, depreciation for each building and improvement, and the details of anything bought or sold. Our tax support for real estate owners makes sure those schedules exist, agree with the books and are backed by documents.

Income and expenses by property

Returns for rental activity are usually prepared property by property. We hand your preparer a summary for each one that ties to the ledger: rents, fees, repairs, utilities, insurance, property tax, management fees, mortgage interest and other costs.

Depreciation records

Buildings and improvements are recovered through depreciation, which needs the cost basis, the date placed in service and the recovery method. Land is generally not depreciable. Publication 946 is the IRS guide. We keep a register per property, including closing statements from purchase, so basis can be supported.

Repairs versus improvements

This is one of the most common judgement calls in rental tax. We keep invoices, photos where you have them and a short description of each larger job, so your preparer can decide whether it is a repair or an improvement.

Buying and selling property

When you buy a property, the closing statement shows costs that may be added to basis. When you sell, the preparer needs the original basis, improvements, depreciation taken and selling costs to work out the gain. We organise all of these in one place.

Records to keep

The IRS publishes guidance on how long to keep records. For property, records relating to basis often need to be kept for as long as you own it and for a period after sale.

Year-end package

  • Income and expense summary per property
  • Depreciation register with additions
  • Mortgage interest and property tax statements
  • Purchase and sale closing statements

We prepare this for your preparer, or can discuss preparation as part of an agreed engagement. See our tax services, how we keep real estate books, or book a consultation.