Tax Preparation for Rental Property Owners

TAX PREPARATION FOR RENTAL PROPERTY OWNERS

For landlords and real estate investors who want their rentals reported correctly — and every allowable deduction taken.

Owning a rental property changes your tax return more than most people expect. Depreciation, passive loss limits, repairs versus improvements, and what happens when you sell all follow their own rules, and small mistakes in the first year can follow you for decades. At Victoria Bogdanovich CPA, rental properties are one of the core parts of our practice. We prepare your personal return together with your Schedule E, so your rental income, losses, and long-term records all fit together.

Who this is for

• Owners of a single-family rental, condo, duplex, or small multifamily property
• Homeowners who moved and kept their former home as a rental
• Investors with properties in Texas or in another state
• Short-term rental owners (Airbnb, VRBO) who aren’t sure how their rental should be reported
• Anyone who bought, sold, or exchanged a rental property this year

What we handle

• Schedule E reporting — rental income, expenses, mortgage interest, property taxes, insurance, management fees, and travel
• Depreciation — setting up the property correctly in the year you place it in service, splitting land from building, and tracking improvements over time
• Repairs vs. improvements — deciding what can be deducted this year and what has to be depreciated
• Passive loss rules — whether your rental losses can offset your other income now, or carry forward to future years
• Short-term rentals — whether your property is treated as a rental, a business, or something in between
• Sales and like-kind exchanges — gain, depreciation recapture, and Section 1031 exchange reporting
• Out-of-state properties — nonresident state returns when the rental is located outside Texas

Common mistakes we see

Not taking depreciation. Depreciation is reduced from your cost basis whether or not you claim it. Skipping it means you lose the deduction now and still pay tax on it when you sell.

Deducting improvements as repairs. A new roof or a kitchen remodel usually has to be depreciated over many years. Getting this wrong can overstate your deductions and create problems if your return is examined.

Misreading the passive loss rules. Many rental owners can deduct some losses against wages, but the allowance phases out as income rises. Losses that can’t be used this year aren’t lost — they carry forward — but only if they are tracked correctly every year.

Treating a short-term rental like a long-term rental. When guests stay a short time on average, different rules can apply, and your losses may be treated differently than you expect.

Missing records from prior years. If a previous preparer didn’t keep depreciation schedules, we rebuild them from your closing statements and prior returns so your basis is right when you sell.

How it works

1. Check your fit — about 1 minute. Answer a few questions and see your starting fee.
2. Create your client portal account and complete our Client Application.
3. Meet with us — free Tax Discovery meeting. Upload your last two years of returns at least 24 hours before the meeting so we can discuss an estimated fee range on the call.
4. Receive your engagement package with your estimated fee and scope of work. Work begins once you sign.

Starting price

Personal return with one rental property: starting at $1,295.

Two or more rentals, properties in another state, short-term rentals, and sales or exchanges are quoted after we review your last two years of returns. Your final fee is an estimated range we discuss at the Tax Discovery meeting. Your engagement package sets out your estimated fee and what it covers. Work outside that scope is billed separately.

See your starting fee

Frequently asked questions

What documents do I need for my rental property?
A summary of rents received and expenses paid (or your property manager’s year-end statement), your Form 1098 for mortgage interest, property tax and insurance statements, and receipts for any improvements. In the year you buy or sell, we also need the closing statement.

I bought my rental this year. What’s different?
The first year sets up your depreciation for the life of the property, so we review your closing statement carefully to separate land, building, and closing costs. Getting this right now saves problems later.

Can my rental loss reduce the tax on my salary?
Sometimes. It depends on your income, how involved you are in managing the property, and whether the property is a short-term rental. We’ll explain how the rules apply to you and track any losses that carry forward.

My rental is in another state. Do I need another return?
Usually yes, if that state has an income tax. Texas has no state income tax, but a rental in California, Colorado, or another income-tax state generally requires a nonresident return there.

I’m selling a rental property. When should I talk to you?
Before you sell, if possible. Planning ahead lets us estimate the tax, including depreciation recapture, and discuss options such as a like-kind exchange. Planning is quoted separately from return preparation.

Do you also prepare business returns for an LLC that owns my rentals?
Yes. If your rentals are held in a multi-member LLC or partnership, we prepare the partnership return along with your personal return. Ask about our Business Owner Package.

Ready to see where you fit? Take the 1-minute fit check or see our pricing and how it works.