Yes, you can deduct maintenance and other expenses on your rental property.
If you actively participate in a rental real estate activity, you can deduct up to $25,000 of your rental loss even though it’s passive. To actively participate means that you:
- own at least 10% of the property, and
- make major management decisions, such as approving new tenants, setting rental terms, approving improvements and so forth. (No, you don't have to mow the lawn or answer middle-of-the-night phone calls from tenants about a backed-up toilet.)
You want to report the expenses even if they are not deductible in the current year due to income limitations so the expenses will carryforward and be deductible when you sell the property.
Real Estate Tax and Rental Property
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