Rental Property Deductions You Can Take at Tax Time

When it comes to the tax deductions you can take as a rental property owner, are you keeping good records and taking advantage of all the deductions available to you?  Did you know that owning a rental property often offers larger deductions and tax benefits than most other investments?

I thought you might be interested in a recent article we posted on our blog on this important topic, “Rental Property deductions you can take at tax time” which highlights a few tips to help you maximize your NOI and deduct expenses on your Real Estate investments.

“You see people moving out of town or state to go to a better job.  If they can’t sell their house, they rent is.” –David Ayoub, CPA in Syracuse, N.Y.

Remember, having an experienced team of professionals like Desert Wide Properties will lead to increased revenue and greater returns.  We will consistently update you on the market, offer comprehensive analysis reports of your rental homes and develop a mutually beneficial business relationship with you our client.  Our expertise in the business and knowledge of the Real Estate market keeps us as a trendsetter in the business.

~ Lorrie Baker, Desert Wide Properties


Courtesy by Turbo Tax


Rental property often offers larger deductions and tax benefits than most investments. Many of these are overlooked by landlords at tax time. This can make a difference in making a profit or losing money on your real estate venture.
If you own a rental property, the IRS allows you to deduct expenses you pay for the upkeep and maintenance of the property, conserving and managing the property, and other expenses deemed necessary and associated with property rental.

Employees and independent contractors

Landlords can deduct wages and salaries for employees, such as for residential managers and staff grounds maintenance workers. Other tax-deductible services that can be used as deductions are independent contractors, such as:

  • Carpenters, electricians and plumbers;
  • Architects, landscapers and gardeners;
  • Roofers, carpet-layers and painters.


Rental property deductions

Keep each contractor’s tax ID number, especially if they are unincorporated, and submit the amount you paid them on IRS Form 1099-MISC. If you paid the contractor less than $600 over the course of the year, this form is not required. However, you are still allowed to deduct the expense.

Deductible expenses for rental property

A landlord is allowed to deduct any reasonable expenses used in the conduct, maintenance and managing of her rental properties. That includes:

  • Utilities
  • Taxes
  • Necessary and reasonable repairs to the property
  • Travel costs incurred while doing business


Expenses that are sometimes overlooked, according to David Ayoub, CPA in Syracuse, N.Y., are meal and entertainment expenses for employees. “You can only deduct 50 percent of meal and entertainment expenses incurred while doing business with potential clients or business associates. However, if you throw a Christmas party or a summer picnic for your staff, it’s 100 percent deductible.”

Accidental landlords

It’s not unusual for someone to become a landlord out of circumstantial necessity.

“You see people moving out of town or state to go to a better job. If they can’t sell their house, they rent it,” Ayoub notes. “If you rent your home for three years out of five, and then sell it, the capital gain is taxable.

However, if you sell it within two years, you don’t have to claim capital gain. You’re also entitled to the same deductions as any other landlords. As with any rental property, make sure you have landlord insurance on your home. It’s deductible as an expense, too.”