How to Hand Your CPA a Clean Rental File in One Afternoon
A checklist for landlords: the income, expenses, documents, depreciation history and year’s changes a preparer needs, gathered in four hours.
By Seayora Editorial Team · Published · Facts checked · 2 min read
Short answer: A preparer needs four things for each rental: income and expenses by property and Schedule E line, the documents behind them, the depreciation history, and anything that changed during the year, such as a purchase, a sale, an improvement or a new loan. Gather them in that order and most of the back-and-forth that delays a return disappears.
Hour one: income and expenses by property
- Rent received for each property, including late fees, advance rent and any deposit you kept.
- Every expense assigned to a property and to a category that matches a Schedule E line (Schedule E line by line).
- A list of anything you could not assign, so your preparer can decide it rather than find it.
Hour two: the documents behind the numbers
| Document | Where it comes from | Where it goes |
|---|---|---|
| Form 1098, mortgage interest | Your lender, by January 31 | Schedule E, line 12 |
| Property tax bills and receipts | Your city or county | Schedule E, line 16 |
| Insurance declarations pages | Your insurer | Schedule E, line 9 |
| Forms 1099 you received, such as a 1099-MISC from a manager | The payer | Checked against rent on line 3 |
| Forms 1099-NEC you filed for contractors | Your own filing | Kept with the return |
| Closing statement for a purchase or sale | The settlement agent | Basis and gain |
Hour three: depreciation and improvements
- Last year’s depreciation schedule, usually in last year’s return.
- Each improvement placed in service this year, with its cost and date (repair or improvement).
- Any cost segregation study, with its component schedule (depreciation on a rental property).
Hour four: what changed this year
- A property bought, sold or converted to or from personal use.
- A refinance or a new loan, with its closing statement.
- Days you or your family used a property personally.
- A new entity, a new state, or a new manager.
- Whether you made the de minimis or small taxpayer safe harbor elections last year, and want to again.
How should you send it?
One folder per property, a one-page summary on top with each property’s rent and expenses by line, and the documents behind it. Send it once, complete, rather than in pieces. The IRS’s Publication 527 is the reference your preparer works from.
Seayora’s Tax Center produces the first hour for you: rent and expenses by property and Schedule E line, the expenses it could not place, and a readiness list of what is still missing, downloadable as a spreadsheet.
Frequently asked questions
Should I send bank statements to my preparer?
Usually only if they ask. A summary by property and line, with the documents for the large items, is what most preparers want first.
Sources
- Publication 527, Residential Rental Property, IRS
- Instructions for Schedule E (Form 1040), IRS
- About Form 1098, Mortgage Interest Statement, IRS
How Seayora helps
The Tax Center readiness list: What is ready for your preparer and what is still missing, checked live.
This article is general information, not tax advice. Tax rules change and your situation is your own, so confirm the treatment with a CPA or enrolled agent before you file.
How we write and check these guides: editorial standards.
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