Hi @denisebox
I am sorry to hear about the loss of your husband. I am glad you could join us today, I hope I can provide you some insight to at least get started on gathering the information.
Rental income is taxable at your ordinary income tax rates. But keep in mind that you are allowed to reduce your rental income by subtracting expenses that you incur to get your property ready to rent, and then to maintain it as a rental.
Having a management company can be helpful to handle the day to day operations and help you track the direct income and expenses. Most management companies will provide the owners with an annual statement detailing the rents and expenses. Keep in mind that the expenses listed by the management company will be limited to repairs, management fees, cleaning, etc. You are likely incurring other expenses including insurance, mortgage interest, hoa fees, travel related to the rental, etc that you will need to track.
Here is a list of documentation you may want to gather when preparing your return:
- General information about the property such as when the home was purchased, when you started to rent the property, and the number of days you rented and the number of days you used for personal use;
- Management company's annual statement of income and expenses and/or Form 1099 MISC for rents collected;
- Form 1098 if you have a loan on the property. The will provide you with the interest paid during the year on the mortgage;
- Property taxes paid on the property;
- Insurance costs;
- Travel logs to and from the property that were necessary to maintain the rental;
- Any other direct or indirect costs you incurred to maintain the property.
All of the rental information will be reported on Schedule E. TurboTax is great at guiding you through the setup of the rental property and helping you to capture the income expenses. You will also deduct depreciation on the property. Using the information in bullet one above TurboTax can set up the property and calculate the appropriate annual depreciation.
Here is a great article by TurboTax to answer some of your questions
Rental Property
Thank you!
Melanie
