Rental Property

[user17744465357]

Is rental property considered passive or active income when you are working with property management company who asks your approval on tenants and major expenses?

[SharonD007]

Rental property income is generally classified as passive by the IRS, even when using a property management company. While your involvement in approving tenants and major expenses constitutes "active participation"—allowing you to potentially deduct up to $25,000 in losses—it does not change the classification to active (non-passive) income unless you qualify as a real estate professional.

[user17744465357]

I had to pay more than $25K in property taxes on rental property due to homestead exemption back taxes issues. How do I claim this expense when filing?

[user17744465357]

I had to pay more than $25K in property taxes on rental property due to homestead exemption back taxes issues. How do I claim this expense when filing?

[SharonD007]

Enter rental property taxes under the Rental Properties and Royalties (Sch E) section of Wages & Income. 

1. Select Add/Edit next to Rental Properties and Royalties
2. Select the pencil to edit the rental property (or add it)
3. Select Add expenses or Asset by the property
4. Check the box next to Real Estate Taxes and Continue
5. Select the pencil next to the Real Estate Taxes to edit
6. Enter the amount of your property taxes.

Refer to the TurboTax article Where do I enter income and expenses from a rental property? For more information.