Rental Questions

[SN2007]

I have couple of questions regarding rentals...

1.  Is my Rental income Passive or Non-Passive?   Am I considered an active participant?  Scenario - I have to rental properties - a condo and a townhome.  I have a property manager for the condo and I fully manage the other rental property.  For both rentals, I make decision regarding selecting tenants, rent price, appliance selection and etc.

2.  Regarding home insurance, how do I expense the cost.  Scenario -  If my payment in a tax year spans across two calendar years, I can expense the full amount in the year I'm made the payment.  For example, if my home insurance payments is $600 from September 2019 though August 2020 and $800 from September 2020 through August 2021, for tax year 2020, I can expense the $800 and not have to calculate each month cost to derive the expense.  Is that correct?

Thanks for your forthcoming response.

[MinhT1]

1. In your case, for your rentals, you are an active participant.

And the rental income is passive unless you can be considered as a real estate professional.

Please read my Community answer to check whether you are a real estate professional.

2. As you are using the cash basis, you deduct insurance premiums in the year you actually paid them, even if the coverage extends partially to the next year.