Help with IRS tax question?

Yes using the schedule E along with your 1040 income tax return and the deprecation form for the rental home house for this purpose and time in your life.

Tax Topics - Topic 414 Rental Income and Expenses

www.irs.gov/taxtopics/tc414.html

Generally, cash or the fair market value of property you receive for the use of real estate or personal property is taxable to you as rental income. You can generally deduct expenses of renting property from your rental income. Income and expenses related to real estate rentals are usually reported on Form 1040, Schedule E (PDF). If you provide substantial services that are primarily for your tenant's convenience, you report your income and expenses on Form 1040, Schedule C (PDF). Income and expenses related to personal property rentals are reported on Form 1040 (PDF).

Most individuals operate on a cash basis, which means they count their rental income as income when it is actually or constructively received, and deduct their expenses as they are paid. Some specific types of income are:

Form 1040 (Schedule E), Supplemental Income and Loss

http://www.irs.gov/pub/irs-pdf/f1040se.pdf

Some examples of expenses that may be deducted from your total rental income are:

Depreciation– You begin to depreciate your rental property when you place it in service. You can recover some or all of your original acquisition cost and improvements by using Form 4562 (to report depreciation) beginning in the year your rental property is first placed in service, and beginning in any year you make improvements or add furnishings.

Repairs– Repairs just keep your property in good working condition but do not add to the value of the property.

Operating Expenses

Uncollected rents– If you are a cash basis taxpayer, you cannot deduct uncollected rents as an expense because you have not included those rents in income.

For information on depreciation, refer to Publication 946, How To Depreciate Property. Repair costs, such as materials, are usually deductible. For a discussion of the difference between repairs and improvements, refer to Publication 527, Residential Rental Property (Including Rental of Vacation Homes).

Good Luck to you.

Hope that you find the above enclosed information useful. 09/22/2012

Yes the charges you collect for rental is considered income reported on Schedule E. You need to determine your basis in the property so you can depreciate it. Your basis should be the market value of the property at the time of death of the person you inherited it from unless the relative passed away in 2010. In that case you would need to talk to anyone that handled the estate since they could elect not to file a return but also allocate a step up in basis. If an estate tax return was filed you can determine the market value shown on the return.

Yes. You will need to establish a Fair Market Value of the property on the date you inherited it. Then you will be depreciating it on Schedule E which is where you also will report your rental income and other expenses related to the rental.

this is no different than any other rental, just because you inherited it doesn't change it

yes you will claim this on Sch E and you need to have a basis on which you will depreciate this property as well