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Boone River Financial
512 Second Street
Webster City, IA 50595
Office: 515-832-1319
Fax: 515-832-0319
Email: andy@booneriverfinancial.com
Website: booneriverfinancial.com
2026 Tax Planning Guide
Rental Real Estate Tax Benefits
Some interests in rental real estate qualify for the 20% pass-through income deduction. These enterprises are generally defined as owning real estate to generate rental income. To claim the deduction, you'll need to meet specific requirements.
SMART MOVES: Keep separate books showing income and expenses for each rental real estate enterprise.
Complete 250 hours or more of rental services each year if your rental real estate enterprise is less than four years old. For properties you've owned longer, 250 or more hours of rental services must have been performed in at least three of the past five years. Rental services include advertising the property for rent, collecting rent, and completing routine repairs or maintenance on the property. Maintain meticulous records, including time logs for hours of all services performed, a description of all services performed, dates on which such services were performed, and who provided the services. Attach this report to your tax return.
The formula to figure out your tax liability with the pass-through income provision is complex, so work with your tax professional. They can help you calculate your pass-through income and its tax.
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