Rental property - not required to file

[oceanlovin'ea]

Client is home from service and is going to college. He has a house that he is renting out since 2010. So he has rental income, but not enough to make it necessary for him to file a tax return.
The only reason to file would be to document that he has been renting the house and taking depreciation on the house. He may sell it down the road.

Would you file a return for these years to show that? There is no tax due.

Linda, EA

[mactoolsix]

Filing a return would close those years (in 3 years). Not filing would leave those years open forever. Does he really want to have to dig up old documents if the IRS comes calling 5 or 10 years later? It's cheap insurance to file and be done with it.

And does he have any suspended losses? I think form 8582 must be filed if there were prior year unallowed losses.
Mike

[JohnH]

I agree. Better to file a return, get everything documented, and get that SOL running.

[S T]

Remember that Gross Rental Income would determine the filing requirement.

Here is a prior post http://forum.thetaxbook.com/showthre...l+gross+income

Other posts are valid as well, suspended passive losses, depreciation, etc.

I believe I would file.

Sandy

[oceanlovin'ea]

just need to look

I opened the envelope for 2010 and what do you know! there was a return that had been filed for 2010. He was working at the hospital as a RN. He filed Schedule A also and tuition and fees deduction. So I will have to amend that return.

Then we will move ahead with 2011 and 2012. He stopped working in 2010 and started school full time. I remember being told that.

Linda, EA