How to Claim Rental Income on a Tax Return

by Lauren Treadwell ; Updated July 27, 2017

The Internal Revenue Service requires you to report income you receive from renting out residential property on Schedule E of tax return Form 1040. This form states rental income, related expenses and any losses. You must report rental income all even if the renter only leases one room or floor of the house. You do not have to report security deposits unless you keep all or part of the deposit once the lease ends.

Step 1

Gather the documents pertaining to your rentals. Include leases, proof of payments and current valuations of the property.

Step 2

Download Schedule E from the IRS website or call the IRS to request it.

Step 3

Fill out the top line of page one with your name and Social Security number. List the address and rental type of each property on line one of part one. Check the corresponding box on line two if you used the property as a personal residence for 14 days or 10 percent of the lease term within the tax year.

Step 4

Report total rental income for each property on line three. List expenses you incurred from the rental on lines five through 18, add them together and write the sum on line 19. Report any depreciation in the value of the property on line 20. Add lines 19 and 20 and write the total on line 21.

Step 5

Subtract the figure on line 21 from rental income on line three. Write the result on lines 22, 24 and 26 unless you have a net loss. In that case, see the Schedule E instructions for guidance on how to proceed .

Step 6

Write your name and Social Security number on the top line of page two. Skip parts two, three and four unless you own the rental property under a partnership or S Corporation. Write the figure from line 26 on line 41 and on line 17 of Form 1040 to complete the rental income reporting process.

About the Author

Lauren Treadwell studied finance at Western Governors University and is an associate of the National Association of Personal Financial Advisors. Treadwell provides content to a number of prominent organizations, including Wise Bread, FindLaw and Discover Financial. As a high school student, she offered financial literacy lessons to fellow students.