Rental Income and Expenses – IRS Tax Tips

For the snowbird who also wants to rent out their American vacation home, here are some links to tax tips. My starting point was the IRS page on Rental Income and Expenses – Real Estate Tax Tips. It provides tips on

• When to Report Income —  the year you actually receive it
•  Advance Rent — again report it in the year you actually receive it
• Security Deposits — do not report as income if you plan to return it. If it does not get returned it is income
• Expenses Paid by Tenant — are rental income. You can deduct the expenses if they are deductible rental expenses 
• Property or Services in Lieu of Rent — include the fair market value of the property or services in your rental income.
• Personal Use of Vacation Home or Dwelling Unit —  you must divide your expenses between rental use and personal use.

For more details on the above, see IRS Publication 527 (2012), Residential Rental Property.

Also more details at Topic 414 – Rental Income and Expenses.

In the U.S.A. you need to depreciate your property, so Publication 946 (2011), How To Depreciate Property is worth a read.

You will also want to check out Topic 415 – Renting Residential and Vacation Property.