Every Landlord's Tax Deduction Guide

Every Landlord's Tax Deduction Guide

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Every Landlord's Tax Deduction Guide


, 16th Edition

Maximize your tax deductions

Maximize your deductions without drawing the ire of the IRS. Since deducting expenses can make the difference between earning a profit and going into the red, use this book and get the most out of your rental properties! Find out how to:

  • fill out IRS Schedule E
  • deduct repairs under IRS rules
  • deduct losses arising from real estate ownership

This new edition is completely updated to cover the Tax Cuts and Jobs Act.

See below for a full product description.

Available as part of the Nolo's Landlord Bundle

Product Details

Named a "Top 10 Real Estate Book" by Robert Bruss, syndicated real estate columnist

Rental real estate provides more tax benefits than almost any other investment. Every Landlord’s Tax Deduction Guide is the only book that focuses exclusively on IRS rules and deductions for landlords.

The book covers the Tax Cuts and Jobs Act, including the new 20% pass-through deduction and other changes that are particularly beneficial to landlords. Learn about landlord tax classifications, reporting rental income, hiring workers, and depreciation.

Find out how to:

  • handle casualty and theft losses
  • distinguish between repairs and improvements
  • deduct home office, car, travel, and meals
  • keep proper tax records - and much more.

Filled with practical advice and real-world examples, Every Landlord’s Tax Deduction Guide will save you money by making sure you owe less to the IRS at tax time.

“This unusual book makes tax tactics actually interesting, whether you are a novice or a serious full-time investor.”-The Washington Post

“The best of the best...heavily emphasizes maximizing depreciation deductions.”-Chicago Tribune

Number of Pages

About the Author

Table of Contents


1. Tax Deduction Basics for Landlords

  • How Landlords Are Taxed
  • What is Rental Income?
  • How Income Tax Deductions Work
  • How Property Ownership Affects Taxes

2. Landlord Tax Classifications

  • The Landlord Tax Categories
  • Business Owner Versus Investor
  • Are You Profit Motivated?

3. Deducting Your Operating Expenses

  • Requirements for Deducting Operating Expenses
  • Operating Expenses That Are Not Deductible

4. Repairs

  • IRS Rules: Repair Versus Improvement
  • How to Deduct Repairs and Maintenance

5. Depreciation Basics

  • Depreciation: The Landlord’s Best Tax Break
  • Understanding the Basics
  • How to Depreciate Buildings
  • Depreciating Land Improvements
  • Depreciating Personal Property
  • When You Sell Your Property
  • Tax Reporting and Record Keeping for Depreciation

6. Maximizing Your Depreciation Deductions

  • Determining the Value of Your Land and Buildings
  • Cost Segregation

7. The Pass-Through Tax Deduction

  • Your Rental Activity Must Be a Business
  • You Must Have a Pass-Through Business
  • You Must Have Qualified Business Income
  • You Must Have Taxable Income
  • Calculating Your Pass-Through Deduction
  • Landlords Who Own Multiple Properties
  • Strategies to Maximize the Pass-Through Deduction
  • Landlord Business Safe Harbor Rule

8. Interest

  • Interest Landlords Can (and Can’t) Deduct
  • Mortgage Interest
  • Other Interest Expenses
  • Points and Prepaid Interest
  • Interest on Construction Loans
  • Loans With Low or No Interest
  • Loans on Rental Property Used for Non-rental Purposes
  • Limitation on Interest Deductions by Landlords Earning $25 Million or More

9. Start-Up Expenses

  • What Are Start-Up Expenses?
  • Determining Your Business Start Date
  • How to Deduct Start-Up Expenses
  • If Your Business Doesn’t Last 15 Years
  • If Your Business Never Begins

10. The Home Office Deduction

  • Qualifying for the Home Office Deduction
  • Calculating the Home Office Deduction
  • Simplified Home Office Deduction Method
  • IRS Reporting Requirements
  • Deducting an Outside Office

11. Car and Local Transportation Expenses

  • Deductible Local Transportation Expenses
  • The Standard Mileage Rate
  • The Actual Expense Method
  • Other Local Transportation Expenses
  • Reporting Transportation Expenses on Your Tax Return

12. Travel Expenses

  • What Are Travel Expenses?
  • Deductible Travel Expenses
  • How Much You Can Deduct

13. Hiring Help

  • Deducting Payments to Workers
  • Employees Versus Independent Contractors
  • Tax Rules When Hiring Independent Contractors
  • Tax Rules for Employees
  • Hiring Your Family
  • Hiring a Resident Manager

14. Casualty and Theft Losses

  • What Is a Casualty?
  • Calculating a Casualty Loss Deduction
  • Disaster Area Losses
  • Repair and Replacement Costs of Casualty Losses
  • Tax Reporting and Record Keeping for Casualty Losses

15. Additional Deductions

  • Dues and Subscriptions
  • Education Expenses
  • Gifts
  • Insurance for Your Rental Activity
  • Legal and Professional Services
  • Meals and Entertainment
  • Taxes
  • Unpaid Rent

16. Deducting Rental Losses

  • What Are Rental Losses?
  • Overview of the Passive Loss Rules
  • The $25,000 Offset
  • The Real Estate Professional Exemption
  • Deducting Suspended Passive Losses
  • Tax Reporting for Passive Rental Losses
  • Strategies for Dealing With the Passive Loss Rules
  • $250,000/$500,000 Annual Loss Limit
  • At-Risk Rules
  • How to Deduct Rental Losses

17. Record Keeping and Accounting

  • What Records Do You Need?
  • A Simple Record-Keeping System
  • Accounting Methods
  • Tax Years

18. All About Schedule E

  • Who Must File Schedule E?
  • Filling Out Schedule E

19. The Net Investment Income Tax

  • How the NIIT Works
  • Real Estate Professional Exemption From the NIIT
  • Planning to Avoid the NIIT


Sample Chapter


This is a book about income tax deductions for landlords—that is, people who own residential rental property. If you are one of the millions of Americans who owns a small number of residential rental units (one to ten), this book is for you. And even landlords who own dozens of residential rental properties will find lots of useful information in this book that can help them save money.

No landlord would pay more than necessary for utilities or other operating expenses for a rental property. But, every year millions of landlords pay more taxes on their rental income than they have to. Why? Because they fail to take advantage of all the tax deductions available to owners of residential rental property. That’s where this book comes in. It gives you all the information you need to maximize your deductions—and avoid common deduction mistakes. You can (and should) use this book all year long, to make April 15 as painless as possible.

When it comes to understanding your taxes, you need guidance more than ever. The Tax Cuts and Jobs Act, the most sweeping change to the tax code in over 30 years, went into effect in 2018. Landlords were among the biggest winners under the new law. We explain how tax reform affects landlords, including:

  • the new 20% tax deduction for pass-through business owners (see Chapter 7)
  • the new lower individual tax rates (which will benefit most landlords) (Chapter 1)
  • the expanded bonus depreciation and Section 179 expensing rules which now allow landlords to fully deduct personal property used in a rental activity (Chapter 5)
  • how landlords can supercharge their first-year depreciation deductions for rental property by combining cost segregation with the new 100% bonus depreciation (Chapter 6)
  • new limits on deducting business losses (Chapter 16)
  • new limits on deducting interest and how to avoid them (Chapter 1).

Even if you work with an accountant or another tax professional, you need the information in this book. It will help you provide your tax professional with better records, ask better questions, obtain better advice, and, just as importantly, evaluate the advice you get from tax professionals, websites, and other sources.

If you do your taxes yourself (as more and more landlords are doing, especially with the help of tax preparation software), your need for knowledge is even greater. Not even the most sophisticated tax software can decide which tax deductions you should take or tell you whether you’ve overlooked a valuable deduction. This book provides do-it-yourselfers with the practical advice and information they need to take full advantage of the many deductions available to landlords.

This book is written for traditional landlords who rent out their property full time to long-term tenants. If you rent your property to short-term guests through Airbnb, VRBO, or any other short-term rental platform, see Every Airbnb Host’s Tax Guide by Stephen Fishman.

Customer Reviews

8 Reviews





Increase Positive Cash Flow By Deducting Expenses by Anonymous
In 2016 my wife and I decided to invest in rental properties. Not to "retire" but to increase our income so we could quit the 40+ hour week working for others but still keep our income or increase it. We were blessed enough to not have to depend on any mortgages. We knew the rental game but not the tax rules.
NOLO's guide told us EVERYTHING we needed to know for tax documentation and IRS forms. It saved us a lot of money explaining the deductions and documentation which, in turn, saved our accountant time which is $$$$. Read that more positive cash flow.
This will apply if you are young and intend to let the rent build equity and wealth by paying the mortgage, or if you do not need to depend on morgages.
Get the most out of you rentals with the NOLO Tax Deduction Guide. (Posted on 12/12/2019)

Great Resource by Anonymous
Takes a complicated subject and uses layman's terms to make it easy. Worth its weight in gold. Love the examples- they help clarify the subject matter. (Posted on 12/12/2019)

Review by Anonymous
This book is extremely helpful in providing tax information. Very easy to understand guidance for a new or long term landlord. The examples provided are also helpful. I found one deduction that i never knew existed. I highly recommend! (Posted on 12/12/2019)

Review by Anonymous
Found it extremely helpful and easy to understand. (Posted on 12/12/2019)

Review by Anonymous
very helpful (Posted on 12/12/2019)

Review by Neil O.
A must for anyone getting into the rental business (Posted on 12/12/2019)

Saved $$$$ by Richard G.
Very helpful. Many items I had forgotten. New laws and rates saved me much this tax year. (Posted on 12/12/2019)

Must read guide to taxes for landlords by Katrina D.
Great, easy to read, straightforward guide to taxes for landlords. It's a lot to digest and is great to own to reference often! (Posted on 12/12/2019)

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