How to report Rental property information

[sking10]

I am struggling a little with reporting rental property information since I am using Turbo Tax for the first time and my taxes were filed by an accountant till last year.

1. Monthly rent is the only income generated. Does this mean only thing I need to add in the Income section is "Cash, checks, and electronic payments (like Square or PayPal)"?
2. Under Expenses / Assets (Depreciation) section, I have entered expenses such as real estate taxes, insurance premiums, mortgage interest, management fees and Rental property checkbox under Assets was pre-selected. When I edit the listed property under Assets, it's asking me for the following fields:
   • Date - is this the date of purchase?
   • Cost - is this the total purchase price?
   • Land - is this the land value per county records for the year 2024 or the land value in the year it was purchased?
   • Business % - minimum value expected is 1 in this field. What should I enter here considering the property is not used for a business purpose and its just an investment property?
   • Prior deprec. - Since this is the first time I am using Turbo Tax, will this come from my last year's tax returns? Which form I need to look for to get this information?
3. Does the Passive loss carryover amounts apply to only those rental properties where income was less than the expenses?

[KrisD15]

1. Yes, if you only receive cash as rent, that would be the only income reported. 

2. Had you already entered the rental property where it asks for the address and type? 

Date purchased, yes.

Cost of rental and cost of land should have been reported on a prior year Schedule E. You need to use the same numbers that the accountant used last year unless the rental was new for 2024. The building is depreciated but the land is not, so you would need to continue the values that were used the first year. 

If it is ONLY a rental and not used by you as a vacation home, you would choose 100%.  Yes, you need to look at the asset depreciation schedule for the prior depreciation. Look for Form 4562. 

Depreciation starts when the rental is put into service and does not end until the rental is sold or converted to personal use. You will need to know the deprecation at that time since there is almost always depreciation recapture when the rental is sold. 

3. Yes. If a rental generates a loss, the loss is considered "Passive". Passive loss may be limited based on your participation in the rental and your income. 

Unless you have a management company make all the decisions, you would select that you materially participate in the rental. 

[sking10]

@KrisD15 

Yes I added the rental property.  Where on Schedule E do I find the cost of rental and cost of land reported? What line item would it be listed under?

[KrisD15]

Look for Form 4562, it is the depreciation schedule.

It will have the building and land values entered on the left. 

The last two columns on the right show the prior year depreciation and the current (2023) year. You add those together for the depreciation to enter into the 2024 tax year TurboTax program.

When you enter the values and the date the rental was put into service, the program will estimate the depreciation that was claimed, but you may need to adjust. 

Next year, TurboTax will forward the numbers into your 2025 tax year return. 

[sking10]

@KrisD15 so the form 4562 that's in my previous year tax returns looks like this one - https://www.irs.gov/pub/irs-pdf/f4562.pdf  which is very different than the screen shot you shared.

[KrisD15]

What year was the rental placed into service? 

[sking10]

So I have to report three rentals.

1. First rental was purchased and placed into service in 2020.
2. Second was purchased and placed into service in 2021.
3. Third was purchased and placed into service in 2024 which I will be reporting for the first time.

[KrisD15]

The Form 4562 you linked will only show the depreciation for that one year, although it does tell you the basis/value of the rental. (Section B line 19h)

Within your tax documents, there should also be a deprecation schedule which will look more like the form I clipped. It will have the running total for each rental.