Residential Rental Properties


Residential rental properties play a significant role in the economy of the United States, as they provide a valuable source of living accommodation for those members of society who either cannot afford their own home or who choose not to do so. In 2019, there were 43 million rental units in the United States, indicating that there are large numbers of taxpayers who own rental dwellings and must report their rental activities on their tax returns.

This course reviews the general principles that apply to residential real estate activities, and it extends the practical application of these rules to a broad range of situations of different types such as part-personal use, part-dwelling use, and part-year use. Also discussed is the application of the rules to dwellings of different types such as condominiums and co-operative housing units. The methods for calculating depreciation in these different scenarios are presented, together with the rules and exceptions that apply to the deductibility of losses from rental activities.

Learning Objectives

After completing the course, students will be able to:
  • identify the rules and tax treatment that apply to the different types of rental income events that may occur in a residential rental situation
  • given examples of the types of expenses (including repairs and improvements) a taxpayer may incur in relation to earning rental income, identify the manner in which each should be treated for tax purposes
  • recognize situations in which “personal use” applies to a rental property and correctly determine the number of days in which personal use has taken place
  • apply the general method used to correctly apportion rental income and expenses for a rental property when that property is used partly for personal use
  • identify the correct methods used for tax purposes to treat capital improvements to property in condominium associations and housing cooperatives by taxpayers with property ownership stakes in those housing entities
  • use Form 1040 Schedule E and other supporting forms to correctly report taxpayer rental activity, applying appropriate rules in relation to the deductibility of any losses

Tax Year: 2021

Designed For

CPAs, EAs, and other tax professionals

Advanced Preparation


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