BiggerPockets Daily 1149 - Rental Income Taxes by Chris Bibey
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Dec 7, 2023 Expert in rental income taxes, Chris Bibey, discusses the categorization of rental income into active and passive income. He advises on understanding tax structures, optimizing deductions, and reporting rental income accurately. Special considerations for real estate investors, such as transferring net figures and filing state tax forms, are also discussed.
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Rental Income Types
- Rental income is categorized into active and passive types.
- Active income involves hands-on management, while passive income comes from long-term, less involved leases.
Taxable vs. Non-Taxable Rental Income
- Taxable rental income includes regular rent, advance rent, and fees for lease cancellations.
- Non-taxable income includes rent from personal residences (under 15 days) and refundable security deposits.
Deductible Expenses
- Familiarize yourself with deductible expenses to reduce taxable rental income.
- Common deductions include mortgage interest, depreciation, property taxes, repairs, insurance, utilities, travel, and professional fees.