Tax Preparation for Rental Homeowners


January 27, 2016Tax Time North County Property Group

It’s tax time again and April 15th will be here soon. North County Property Group is preparing tax documentation for our homeowners and thought other rental homeowners might be curious about our process, timing, and forms our clients will be receiving. These processes may only be applicable to California and research should be done to find  out the regulations for your particular location.

 

Tax Implications for Renting Out a Property

  • We advise all of our property owners to consult with their tax accountant regarding the reporting and handling of rent income on their annual tax return.
  • North County Property Group reports the gross rental income collected on a 1099 form to the IRS and State of California. Since the amount reported is “gross” rents, the amount on the 1099 will be different from what has been paid to the owners through their distributions.
  • In addition to your 1099, NCPG will be providing owners with a year end annual statement indicating what has been included in the amount reported on the 1099. Your accountant can also use a statement like this to subtract your expenses on your return to determine your actual taxable income.

For Owners Who Are Residents of Another State

  • If you are a property owner and are not a resident of the State of California and is renting a CA home, you must withhold 7% of the gross rents and report/submit this withholding quarterly to the CA Franchise Tax Board.
  • In addition to the 1099, out of state owners will receive a CA Form 592 showing the total amount of income subject to withholding and the total amount withheld. The CA State withholding will also appear on your 1099 in box 16 “State Tax Withheld”.
  • As the owner of a CA property, you will need to file a CA tax return to report your CA rental income. If the withheld amount is more than the actual tax liability as determined by your tax accountant, then the Franchise Tax Board will refund the over-payment.

Be sure to consult with your tax accountant with any further tax-related questions. Here is a link to the IRS for your reference as well. Please contact North County Property Group with any questions regarding property management or any of the numerous services provided by NCPG.

 

Located in Del Mar (Carmel Valley), California, North County Property Group provides real estate sales & leasing,  property management, and vacation rental services in the various communities throughout the greater North County San Diego area (click here to see communities served). 

For more information about North County Property Group, visit http://www.ncpropertygroup.com, or contact the company at 12526 High Bluff Drive, Suite 145, San Diego, CA 92130, USA; Tel: 858.792.5797; Fax: 858.777.5451; E-mail: info(at)ncpropertygroup(dot)com to learn how we’re redefining Del Mar real estate sales and leasing, property management, and vacation rentals in North County San Diego.

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