This particular article of the Property Rental Tax Guide (“Guide”) focuses on the different IRS tax forms you need as a landlord in order to properly account for, and report, your rental income to the IRS. As is outlined below, the tax forms needed change depending on the type of legal entity that owns the rental property (individual, partnership, corporation, or LLC). See the article titled Best Rental Property Ownership, included in this Guide, for more on legal entity ownership.
TIP: All of the forms discussed below can be found on the IRS’s website, at: https://www.irs.gov/Forms-&-Pubs. If you are using tax preparation software, the software will have all of the necessary forms.
Individual Ownership
This includes joint ownership with a spouse, tenancy in common, or joint tenancy with rights of survivorship.
Form 1040. Foremost, you will need Form 1040, the form filed by all individual taxpayers. Your net rental income or loss subject to tax will appear on line 17 of the first page of Form 1040. Please note that as a landlord with rental activity, you are not allowed to use the simplified Forms 1040A or 1040-EZ.
Schedule E. Schedule E is an addendum to Form 1040. It has various purposes, but the purpose relevant to you is reporting of rental income and expenses. The portion of Schedule E marked as “Part I” is the only portion you need to complete. Several important notes to keep in mind: if you own the rental jointly with someone else who is not your spouse, report only the income that you received and the expenses that you incurred. Additionally, keep in mind that if you rented only for part of the year, or you are renting a portion of your personal home, you will need to allocate expenses between rental and nonrental use. See the series of articles titled Tax Deductible Rental Property Expenses, included in this Guide, for further information.
Form 4562. Form 4562 is used to calculate depreciation on your rental property, which you can deduct on line 18 of Schedule E. See the article titled Depreciation Expenses for Rental Property, included in this Guide, for further information.
Partnership/Corporate Ownership
This includes a general or limited partnership, or S corporation.
Form 1065/1120-S. If you have a partnership, you must use Form 1065, the form a partnership uses to report all of its business operations. An S corporation uses Form 1120-S to report its business operations. Your net rental income or loss will be reported on Schedule K, line 2 of Form 1065 or 1120-S (Schedule K is embedded into those forms).
Form 8825. This form acts like Schedule E, but for partnerships and S corporations. It is essentially very similar to Schedule E. Make sure to include full amounts of all income and expenses incurred by the partnership or corporation (these will be allocated to each partner or shareholder later).
Schedule K-1. This form reports the net rental income or loss that is attributable to each partner or shareholder in accordance with that partner or shareholder’s ownership interest. Each partner receives his or her own K-1 and must report the contents of that K-1 on his or her Form 1040, Schedule E, Part II.
Limited Liability Company (LLC) Ownership
A single-member LLC is a disregarded entity for tax purposes, which means that you may file as though you are an individual owner (see above). A multiple-member LLC may choose to be taxed either as a partnership or as an S corporation (see above).