TIP: You can find all of the documents described directly below on the IRS’s homepage: http://www.irs.gov/Forms-&-Pubs. If you’re using tax preparation computer software, the software will have all of the appropriate forms.

Individual Ownership

Shared ownership with a wife or husband, mutual tenancy with legal rights of survivorship, and tenancy in common will be included in this.

Form 1040. Foremost, you will need Form 1040, the form submitted by all independent taxpayers. At line 17 of the first page of Form 1040 is your net leasing profit or financial loss, subjected to taxes. You should be aware that as a law abiding property owner with rental property income and expenses, you will not be allowed to utilize the simplified Forms 1040A or 1040-EZ.

Schedule E. Schedule E is a certain addendum of Form 1040. It has a number of usages, though the function applicable to your needs is reporting of rental earnings and costs. The one portion of Schedule E that you should fill in is the section marked as “Part I”. There are several important notes you must bear in mind, including: when you own the rental mutually with anyone other than your significant other, report only the revenue that you received and the expenditures which you sustained. Keep in mind, , that you’ll have to keep track of your expenses relating to rental and non-rental usage when you are renting a portion of your home, or whenever you only rented for a part of the entire year. Read the set of articles titled Tax Deductible Rental Property Expenses, available in this Guide, for more details.

Form 4562. Form 4562 is required to determine depreciation for your rental, which you’ll want to deduct on line 18 of Schedule E. For additional info, view the article entitled, Depreciation Expenses for Rental Property, that is available in this Guide.

Partnership/Corporate Ownership

A general or limited partnership, or S corporation is an example.

Form 1065/1120-S. If you have a joint venture, you must use Form 1065, the form a joint venture utilizes to report everyone of its business operations. Form 1120-S is employed by an S corporation to report business activities. Schedule K, line 2 of Form 1065 or 1120-S is where the total leasing loss or profit are reported (Schedule K is embedded inside these documents).

Form 8825. Form 8825 is for partnerships and S corporations, but it acts similar to Schedule E. It’s essentially similar to Schedule E. Be sure that all profit and operating costs incurred by the corporation or partnership are provided in their entire amounts (they are going to be allocated to each business partner or shareholder later).

Schedule K-1. The total leasing profit or deficit as a result of each investor or partner is reported by this tax document, in line with the property ownership interest of that shareholder or business partner. The information of the K-1 received by each and every partner will have to be reported on his or her Form 1040, Schedule E, Part II.

Limited Liability Company Ownership

You could file as if you were an independent property owner since, for tax purposes, a single-member LLC is actually a disregarded entity (notice above). A multiple-member LLC can decide to be taxed as a partnership or as an S corporation (look above).

Seattle CPA +John Huddleston has written extensively on tax related subjects of interest to small business owners. He is a graduate of Washington State University and the University of Washington School of Law.