Which TurboTax Does a Rental Property Owner Need?

Landlord reviewing rental property documents in front of a house

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Owning a rental property turns you into a small landlord business for tax purposes. You report your rental income and subtract your expenses on Schedule E, and the profit (or loss) flows to your return. Landlords get a generous set of deductions, including mortgage interest, property taxes, insurance, repairs, management fees, and travel to the property. One of the biggest is depreciation, which lets you deduct part of the building's cost each year even though you didn't spend any cash on it.

Things get more involved with multiple properties, mixing personal and rental use, or selling a property, which brings depreciation recapture into play. There's also the line between repairs, which you deduct right away, and improvements, which you depreciate over time. The software keeps these straight, but you'll need organized records for each property.

Our recommendation

TurboTax Premium (Online)

Premium handles rental property income and expenses on Schedule E in an online format, including depreciation and the full range of landlord deductions. It absorbed the old Premier tier for online filers, so it's the right online home for rental activity. It walks you through setting up each property and calculating depreciation so you don't have to do it by hand.

See TurboTax Premium (Online) Official site

Alternatives to consider

TurboTax Premier (Desktop)

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If you prefer installed software for rentals and investments, or own several properties.

TurboTax Live Assisted Premium

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If you want an expert to review your depreciation, passive loss rules, or a property sale.

Depreciation: your biggest hidden deduction

You can't deduct the cost of a rental building all at once, but you depreciate it over many years, which gives you a sizable annual deduction without spending any new money. You depreciate the building, not the land, so you'll separate the two. Premium walks you through setting up depreciation and carries it forward each year. Just remember that depreciation reduces your basis, which matters when you eventually sell.

Repairs versus improvements

A repair keeps the property in working order, like fixing a leak or repainting, and is generally deductible in full this year. An improvement adds value or extends the property's life, like a new roof or an addition, and has to be depreciated over time. Mixing these up is a common mistake. TurboTax asks questions to sort them out correctly so you claim each one the right way.

Frequently asked questions

Do I have to take depreciation?＋

Effectively, yes. Even if you skip it, the tax rules generally treat you as if you took it when you sell, through depreciation recapture. So you should claim it each year to get the benefit. Premium handles the calculation for you.

I rented my place only part of the year. How does that work?＋

You split income and expenses between personal and rental use based on time and use. TurboTax asks how the property was used and divides up the numbers accordingly.

Can rental losses reduce my other income?＋

Sometimes, but passive loss rules can limit how much you deduct in a given year, with the rest carried forward. Premium applies these rules and tracks any carryover automatically.

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