If you own rental property, you must report income and expenses related to the activity to the Internal Revenue Service. You’ll claim your transactions on IRS Form Schedule E, Supplemental Income and Loss, and attach the form to your individual income tax return. You can deduct the cost paid for rental property garbage collection as a utility expense.
Gather tax documents that list your rental income and related expenses for the year.
Prepare IRS Form Schedule E. On page one, complete Part 1, Income or Loss from Rental Real Estate and Royalties. Report all rental income received on Line 3 of the Schedule.
Total your paid garbage expenses and any additional utility costs. Report expenses for paid rental property utilities on line 17 of Schedule E.
Total any remaining expenses and subtract the sum from your rental income. Record your profit or loss from rental activity on the first page of your 1040 individual income tax return and attach Schedule E to your 1040.
Warnings
Generally, you can only claim net real estate losses up to an amount of $25,000. Real estate professionals are excluded from the loss limitation.
References
- IRS.gov: Tax Topic 414: Rental Income and Expenses
- IRS.gov: 2009 Instructions for Schedule E: Passive Activity Loss Rules
- IRS.gov: 2009 Instructions for Schedule E: Exceptions for Certain Rental Real Estate Activities
- United States Department of the Treasury Internal Revenue Service. "2018 Instructions for Schedule E (Form 1040)," Page E-4. Accessed Nov. 19, 2019.
- United States Department of the Treasury Internal Revenue Service. "Publication 527 Residential Rental Property (Including Rental of Vacation Homes)," Page 3. Accessed Nov. 19, 2019.
- United States Department of the Treasury Internal Revenue Service. "2018 Instructions for Schedule E (Form 1040)," Page E-3. Accessed Nov. 19, 2019.
- United States Department of the Treasury Internal Revenue Service. "Instructions for Form 8582 (2018), Passive Activity Loss Limitations," Accessed Nov. 19, 2019.
- United States Department of the Treasury Internal Revenue Service. "2018 Instructions for Form 8582," Accessed Nov. 19, 2019.
- United States Department of the Treasury Internal Revenue Service. "2018 Instructions for Schedule E (Form 1040)," Page E-6. Accessed Nov. 19, 2019.
- United States Department of the Treasury Internal Revenue Service. "2018 Instructions for Form 4797," Page E-6. Accessed Nov. 19, 2019.
- American Apartment Owners Association. "Calculating Gain on Sale of Rental Property," Accessed Nov. 19, 2019.
- United States Department of the Treasury Internal Revenue Service. "Publication 544 (2018), Sales and Other Dispositions of Assets," Accessed Nov. 19, 2019.
- United States Department of the Treasury Internal Revenue Service. "2018 Instructions for form 4797," Page 2. Accessed Nov. 19, 2019.
- United States Department of the Treasury Internal Revenue Service. "2018 Instructions for Form 8949," Page 1. Accessed Nov. 19, 2019.
- United States Department of the Treasury Internal Revenue Service. "Topic No. 409 Capital Gains and Losses," Accessed Nov. 19, 2019.
Warnings
- Generally, you can only claim net real estate losses up to an amount of $25,000. Real estate professionals are excluded from the loss limitation.
Writer Bio
With a background in taxation and financial consulting, Alia Nikolakopulos has over a decade of experience resolving tax and finance issues. She is an IRS Enrolled Agent and has been a writer for these topics since 2010. Nikolakopulos is pursuing Bachelor of Science in accounting at the Metropolitan State University of Denver.