Residential Rental Properties

Overview

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 2021, there were around 113 million people living in rental situations throughout 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

Upon conclusion of this course, you should 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 different types of expenses (including repairs and improvements) that 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
  • correctly calculate the taxpayer's basis for depreciation in a depreciable asset, using the result to calculate the correct amount of depreciation for the asset
  • 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: 2022

Designed For

CPAs, EAs, CMAs, CFEs, CRTPs, CFPs, and other accounting, finance, and tax professionals

Advanced Preparation

None

WebCE® is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org. For more information regarding WebCE administrative policies such as refunds, cancellations and concerns, please contact Support Services at 877-488-9308.

Find this course for your license:

License or Certification

Regulator

Type