Can You Explain the Tax
Implications of My Rental Property?
The short answer is that we cannot fully explain the tax implications of rental real estate. First of all, it would depend heavily on your individual circumstances. Much of that is information that we would not want to know about your personal finances.
We are licensed Real Estate Agents serving as Property Managers. We are not tax experts, investment counselors or accountants. We work with residential real estate every day and also own rental properties. That gives us a good working knowledge of the what’s involved regarding the tax implications of investment rental properties. It doesn’t mean that we are qualified to provide investment and tax advice to you. We can help you do an investment analysis of rental properties. The investment analysis will help you to Determine the Return on Investment (ROI) for any property. You can then use this information to discuss options with your financial team.
We always recommend that homeowners consult with their accountant or tax professional. We collect a signed Form W-9 from each homeowner and each of our contractors. That is so we can provide all of them with the necessary tax documents. At the end of the year, we send a Form 1099-MISC to the Internal Revenue Service and the Maryland Comptroller of the Treasury. We also provide our homeowners with a Schedule E that they can pass on to their tax preparation expert.
The Internal Revenue Service has really good information about Residential Rental Property (IRS Publication 527). We highly recommend that you download and read it as you consult your tax professional.