Year-End Tax Moves for Rental Property Owners

Year-End Tax Moves for Rental Property Owners

If you own rental property, the last few weeks of the year are worth your attention from a tax perspective. Unlike wage income, which is largely fixed, rental property owners have real levers to pull before December 31 that can meaningfully impact their tax bill.

Accelerate Deductible Expenses

If you have repairs, maintenance, or improvements planned, completing and paying for them before December 31 means the deduction applies to this tax year. Painting, HVAC service, landscaping, appliance replacement — anything classified as a repair (not a capital improvement) is deductible in the year it’s paid.

Review Your Depreciation Schedule

Work with your CPA to make sure you’re capturing full depreciation on your properties, including any recent improvements or acquisitions. If you added a new property this year, ensure it’s on the schedule and depreciating from the date it was placed in service (when you started renting it, not when you bought it).

Consider a Cost Segregation Study

If you own a property worth $300,000 or more, a cost segregation study can reclassify components for accelerated depreciation — generating a much larger deduction in year one. These studies typically cost $3,000–$8,000 but can generate tens of thousands in deductions. Year-end is an ideal time to evaluate whether one makes sense before your tax return is prepared.

Prepay Deductible Expenses

Property tax payments due in January can sometimes be prepaid in December and deducted this year. Insurance premiums for the coming year can sometimes be prepaid. Confirm with your CPA which expenses are deductible when paid versus when incurred.

Review Your Entity Structure

If you’ve been meaning to revisit your LLC structure or establish one, year-end is a good time to have that conversation. Some structural changes need to be in place before January 1 to affect next year’s taxes.

The Bottom Line

The window closes December 31. A good real estate CPA will walk you through these moves proactively. If they’re not reaching out to you in Q4, it might be time to find one who does.

Book a call with Equity on Repeat — we’re happy to talk strategy and point you toward the right professionals.