Ask the Advisor – How are reportable income and deductions determined?
Abstract: Determining rental income and deductions for federal tax purposes isn’t always as straightforward as it might seem. Sources of taxable rental income can be overlooked and deductions can be overstated. If such mistakes are uncovered in an IRS audit, they could prove costly. This article looks at the variety of sources that can constitute rental income, along with deductions that will and will not be allowed.