Rental income (losses) generally refers to the income or loss earned from ownership of properties that are rented/leased to another person. Generally, rental income is income from property. There are a few exceptions where it would be considered business income, including:

• A corporation employing six or more full-time employees whose principal business is to earn rental income;

• A business with short-term rentals of small equipment;

• A motel, hotel, or similar hospitality business;

• Long-/short-term business of leasing movable property.

Generally, when we think of rental income we think of real property that is held by a landlord and rented/leased to a tenant. In fact, that makes up vast majority of rental incomes. Rental income, except in a corporation, is usually reported on a cash basis of accounting. Expenses typically include:

• Property taxes;

• Insurance;

• Maintenance

• Mortgage interest;

• Property management fees;

• Advertising;

• Utilities; and

• CCA (restricted).