Rental property and real estate tax
Depreciation you do not claim is still recaptured when you sell. Getting the schedule right from the first year is worth more than any single deduction.
You are in the right place if…
Single-property landlords
One rental, often a former home.
Portfolio investors
Multiple properties, multiple states, passive loss limits.
Short-term rental hosts
Airbnb and VRBO, where the rules differ from long-term letting.
Everything in the fee
- Rental income and expense reportingSch. E
- Depreciation schedules4562
- Passive activity loss tracking8582
- Property sale and gain calculation4797
- 1031 like-kind exchange reporting8824
- Short-term rental classificationSch. C / E
- Multi-state rental returnsState
- Foreign rental property1116
Depreciation is not optional
This surprises people every year: when you sell a rental, the IRS recaptures depreciation you were allowed to claim — whether or not you actually claimed it. Skipping depreciation does not protect you at sale; it simply means you paid more tax in the meantime and the same tax at the end.
If prior years were filed without a depreciation schedule, that is generally correctable, and it is worth doing before you sell rather than after.
Passive losses that go nowhere
Rental losses are usually passive, which means they can only offset passive income unless you meet specific participation tests or fall under the income-based allowance. Losses that cannot be used are not lost — they carry forward and release when you sell — but only if somebody has been tracking them properly year to year.
Short-term rentals are a different animal
Average stay length changes the analysis. A property let in short stays with substantial services provided can fall outside the ordinary rental rules altogether, which changes both the schedule it belongs on and whether self-employment tax applies.