Rental Income = Revenue generated from rental units during a fiscal year. This includes any deposit or last month rent collected from your tenants.
You can deduct any reasonable expenses you incur to earn rental income. The two basic types of expenses are current expenses and capital expenses.
For more information on what we consider a current or capital expense, see Current expenses or capital expenses.
If you are modifying a building to accommodate persons with disabilities, buying an older building, or encounter other situations, see Capital expenses – Special situations.
Some expenses your incur are not deductible. For more information see Expenses you cannot deduct.
The following is a list of expenses that are deductible:
- Prepaid expenses
- Line 8521 – Advertising
- Line 8690 – Insurance
- Line 8710 – Interest
- Line 8860 – Legal, accounting, and other professional fees
- Line 8960 – Maintenance and repairs
- Line 8871 – Management and administration fees
- Line 9281 – Motor vehicle expenses
- Line 8810 – Office expenses
- Line 9180 – Property taxes
- Line 9060 – Salaries, wages, and benefits (including employer’s contributions)
- Line 9200 – Travel
- Line 9220 – Utilities
- Line 9270 – Other expenses
Any cost incurred to the renting of the units may qualify against the revenue generated as rental income.