USA Tax Glossary
Clear tax terms for
real estate investors.
A USA-specific glossary for rental property owners and real estate investors. Each definition is written from an investor tax perspective and reviewed against current IRS guidance as of May 14, 2026.
Individual Rental Reporting
2 definitions
Forms and concepts individual investors often see on Form 1040 returns.
Schedule E (Form 1040)
Schedule E is the Form 1040 schedule used to report income or loss from rental real estate, royalties, partnerships, S corporations, estates, trusts, and REMICs.
Reviewed May 14, 2026Schedule C (Form 1040)
Schedule C is used to report income or loss from a business operated, or a profession practiced, as a sole proprietor.
Reviewed May 14, 2026Entities and Pass-Throughs
4 definitions
Terms that appear when rentals are owned through partnerships, LLCs, or S corporations.
Form 8825
Form 8825 is used by partnerships and S corporations to report rental real estate income and deductible rental real estate expenses.
Reviewed May 14, 2026Form 1065
Form 1065 is the U.S. Return of Partnership Income. A partnership files it as an information return to report income, gains, losses, deductions, and credits.
Reviewed May 14, 2026Schedule K-1
Schedule K-1 reports an owner share of income, deductions, credits, and other tax items from a pass-through entity such as a partnership or S corporation.
Reviewed May 14, 2026Form 1120-S
Form 1120-S is the U.S. Income Tax Return for an S Corporation. It reports S corporation income, deductions, credits, and shareholder pass-through items.
Reviewed May 14, 2026Depreciation and Property Basis
6 definitions
Terms that affect cost recovery, sale planning, and records for real estate assets.
Form 4562
Form 4562 is used to claim depreciation and amortization, make Section 179 elections, and provide listed property information when required.
Reviewed May 14, 2026Depreciation
Depreciation is the annual deduction that lets a taxpayer recover the cost or other basis of business or income-producing property over a number of years.
Reviewed May 14, 2026Cost Segregation
Cost segregation is an analysis that separates parts of real estate into components with different depreciation treatment, often to identify shorter-lived property within a larger building acquisition or improvement.
Reviewed May 14, 2026Bonus Depreciation
Bonus depreciation is an additional first-year depreciation deduction for eligible property.
Reviewed May 14, 2026Section 179 Deduction
Section 179 lets eligible taxpayers elect to deduct the cost of certain qualifying property in the year it is placed in service, subject to dollar, phaseout, business-use, and taxable-income limits.
Reviewed May 14, 2026Depreciation Recapture and Unrecaptured Section 1250 Gain
Depreciation recapture rules can cause part of the gain on sale of depreciated property to be taxed differently because depreciation deductions were allowed or allowable before sale.
Reviewed May 14, 2026Planning and Loss Limitations
4 definitions
Rules that can affect whether losses, deductions, and planning strategies actually help on a return.
Passive Activity Loss
A passive activity loss is a loss from passive activities that may be limited under federal tax rules. Rental activities are generally treated as passive unless an exception applies.
Reviewed May 14, 2026Real Estate Professional Status
Real estate professional status is a federal tax status that can make rental real estate activities nonpassive when the taxpayer meets the statutory tests and materially participates in the rental activities.
Reviewed May 14, 20261031 Exchange
A 1031 exchange, also called a like-kind exchange, can allow gain deferral when business or investment real property is exchanged for other like-kind business or investment real property.
Reviewed May 14, 2026Qualified Business Income Deduction
The Qualified Business Income deduction, also called the Section 199A deduction or QBI deduction, is a deduction for eligible noncorporate taxpayers with qualified business income, subject to limitations.
Reviewed May 14, 2026