Rental properties

What a property is in EscBooks#

A property is a building or piece of land you own: a house let on a lease, a condo on Airbnb, the office your business works from. It has its own page with its own profit and loss, and every record that belongs to it names it: rent, platform payouts, expenses, its loans and its building's depreciation.

EscBooks keeps the books of a property. It doesn't manage it: bookings, tenant screening, maintenance requests and lease documents stay in the tools you use for them.

Each property has:

• Name and Address.
• Type: Schedule E's property types. Single family house (1), Multi-family (2), Vacation or short-term rental (3), Commercial (4), Land (5), Self-rental (7, rented to your own business) or Other (8). The number is the code Schedule E line 1b asks for.
• Use: Rented long-term (let by the month or the year, on a lease), Short-term rental (stays of days or weeks, through Airbnb, Vrbo or your own bookings) or Your business's own building (where the business works, not rented to anyone).
• Bought on, Price and Of which, land: what it cost and when, and the land's share of the price, from your property tax bill or an appraisal. These fill in the building's depreciation (see Equipment).

A property starts with one unit. A multi-family property can have more: type each under Add a unit on its page (like Upstairs or Unit B), and let each on its own lease (see Leases and rent).

Turning on Properties#

Properties is off until you turn it on, since most businesses own no rentals. Any of these turns it on, and the Property group appears in the sidebar:

• Settings → Terms & Features: turn on Properties.
• The Rental property preset in the same place. It turns Properties on and changes none of your words.
• Settings → Business: the filing type Individual with rental property, for rentals owned in your own name with no business.

The Property group has one item, Properties, with four tabs: Properties, Rent Roll, Mortgages and Deposits. Turned off again, your properties stay on file and in your reports.

Adding a property#

1. On Properties, click Add Property.
2. Type its Name (like Maple Street house) and Address, and pick its Type and Use.
3. For a short-term rental reported as a business, tick Report it on Schedule C (below).
4. Add Bought on, the Price and Of which, land, if you have them. Then tick Add the building to depreciation: the price less the land, over 27.5 years for a residential rental or 39 for any other building, from mid-month.
5. Click Add Property.

The building is added under Building and Improvements on the property's page. A new roof, a water heater, appliances or furnishings are added there too, with Add Improvement. Each is written off over its years (see Equipment, which works the same way).

Edit on the property's page changes any of it. A property with rent, a lease with a deposit, or a loan on it can't be deleted: Archive it instead, and it leaves the list but keeps its records.

Which form it lands on#

A property's rent and costs go on the form for rental real estate, which depends on how you file:

• Individual with rental property, or a sole proprietor: Schedule E (Form 1040), one column per property. A sole proprietor's rentals go on Schedule E beside Schedule C, not on it.
• An S corporation or partnership: Form 8825, one column per property. Its net goes to Schedule K.
• A C corporation: rent is Gross rents, line 6 of Form 1120. Its costs go on the usual lines: taxes on 17, interest on 18, depreciation on 20, repairs on 14 and the rest on 26.
• Your business's own building never goes on Schedule E or Form 8825. Its property tax, interest, repairs and depreciation stay on the business's own lines; the property keeps the building and its loan in one place.

A short-term rental is on Schedule E, unless the average stay is 7 days or less and you provide hotel-like services (daily cleaning, meals, a concierge). Then it's a business, reported on Schedule C: tick Report it on Schedule C on the property. EscBooks offers it for a short-term rental when you file as a sole proprietor. Ask your tax preparer if you're not sure which applies.

How you file is set in Settings → Business; see Tax structure.

Costs on a property#

An expense, other income or equipment can name its property: pick it under Property in the dialog. It then counts on that property's page, and in its column of Schedule E or Form 8825. Three categories are for rentals, each a line of its own on Schedule E:

• Cleaning & maintenance: line 7.
• Management fees: line 11. What a property manager or co-host charges.
• Mortgage interest: line 12. Recorded for you with each loan payment (see Mortgages).

The rest go where they always do: Insurance on line 9, Repairs & maintenance on 14, Supplies on 15, Taxes & licenses on 16, Utilities on 17, Advertising on 5, Legal & professional on 10. A platform's host fee is a Commissions expense on line 8 (see Short-term rentals).

One cost shared by several properties#

One insurance policy for two houses, or one landscaper's bill for three, is a split expense, each part on its own property.

1. Open the expense on Expenses and click Split for Split This Charge.
2. Add a part for each property, with its amount and its Property. The parts must add up to the charge.
3. Click Save Split.

Each part counts on its own property. The charge stays one line on your bank statement. More in Expenses.

Days rented#

Schedule E line 2 asks, for each property, how many days it was rented at a fair price and how many days you or your family used it. Type both in once a year under Days Rented on the property's page (Days rented at a fair price and Days of personal use), from your booking platform's year-end report or your own records. EscBooks keeps no calendar.

Personal use days#

When you or your family stay in a rental (or anyone pays less than a fair price), only the rental share of its costs is a rental cost. EscBooks works it out from the days you type in, and Schedule E on Taxes shows each property at its share.

• The rental share is the days rented over the days used, rented and personal. Days it sat empty count as neither. 180 days rented and 20 personal is 90% rental.
• Costs for the whole place, such as mortgage interest, taxes, insurance, utilities, repairs, cleaning and depreciation, count at that share. Fees (the platform's, an agency's), Advertising and Management fees are only for renting it, and count in full.
• The personal share isn't a rental cost. Its mortgage interest and taxes go on Schedule A if you itemize; Schedule E lists how much.
• Used as a home: more than 14 days of personal use, and more than 10% of the days rented. Its rental costs can't be more than its rent, and what's over carries to next year. EscBooks says when that's the case; your tax software or accountant works out which costs to take, in the IRS's order. The property's page shows how many personal days keep it a rental.
• Used as a home and rented fewer than 15 days: the rent isn't reported and its costs aren't deducted. EscBooks leaves it off Schedule E and says so.

The property's page#

On Properties, the year's Rent and Net for all of them, what's Owed on Loans and the Deposits Held are at the top, with a card for each property below. Click one for its page:

• Across the top, the year's rent, its costs before depreciation, depreciation, and the net, with Record Rent.
• Profit and Loss: rent and payouts (at their gross), each cost by category, depreciation, and the net, for the year you pick.
• Loans: its mortgage, with what's owed, and Add Loan. See Mortgages.
• Leases: its tenants, rent and deposits, with Add Lease. See Leases and rent.
• Building and Improvements: the building, improvements, appliances and furnishings, each written off on this property's line.
• Days Rented: the year's fair rental days and personal-use days.
• Records: the year's rent, payouts and expenses on this property.

A property's profit and loss follows your accounting method. Rent counts the day it came in on either one, so rent owed and not yet paid isn't counted; a cost counts on its date. On Reports → Taxes, the Schedule E or Form 8825 card lists the year's figures by line, one column per property.