You can deduct the cost of repairs on your rental property in the year you paid. However, you may not deduct the cost of improvements. You must recover the improvement cost through depreciation, rather than deducted in the year paid.

A repair just keeps the property in good operating condition and does not materially add value to the property. Some examples of repairs are: painting, fixing leaks and cracks, repairing broken gutters, and replacing broken doors or windows or other parts of the rental property.

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Rental property is often a good investment. You can collect rent to covers the cost of the mortgage and repairs while allowing you to own the property with little or no out-of-pocket expense. As the property increases in value, your net worth increases. There are somethings about taxes on rental income and loss you should know when you have rental properties.

Rental Income

• Rent paid and advance rent payments
• Security deposits not returned to the tenant
• Payment for canceling a lease
• Your rental expenses paid by tenant in lieu of rent
• Property or services you receive in lieu of rent,

 » Read more about: Rental Income and Expenses  »