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Jim Revels
Jim Revels, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 210
Experience:  Providing income tax / planning services for over 16 years on all entity and individual tax issues
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I file my taxes in the US, CA. I am employed and get a ...

Customer Question

I file my taxes in the US, CA. I am employed and get a regular salary. 2007 I received some rental income from Germany: about $6000 minus $2000 in expenses for the rental property. I use Turbo Tax, but I don''t understand whether I need to report it and how to do it. They say that "...rents or royalties are considered earned income only to the extent representing reasonable compensation for services performed" Does it mean that I don''t need to report it? What do I do? I want to get my taxes right. Thank you.
Submitted: 8 years ago.
Category: Tax
Expert:  Jim Revels replied 8 years ago.

Thank you for choosing Just Answer. You are correct you do need to report the income form the rental in Germany as well as the deductions. The income and deductions shold be reported on Schedule E (Rental Income), Additionally, you should be able to depreciate the cost of the property over 27.5 years. Turbo Tax is pretty good stepping you through the input screens.

http://www.irs.gov/pub/irs-pdf/f1040se.pdf

http://www.irs.gov/instructions/i1040se/index.html

 

Kindest regards

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