What's the minimum association size you manage?

We work with associations from 12 to 250 units. Our sweet spot is 12–250+ units, where the operational complexity justifies senior-level management. For associations under 12 units, we refer to specialist firms better suited to that scale.

How does your Finance-Only tier work?

Finance-Only is a productized tier for self-managing boards that need professional financial oversight. It includes dues collection, AR/AP, monthly financial statements, board portal access, annual budget preparation, and 1099 prep. Operations remain with your board. It is a clean entry point with a clear upgrade path to Full-Service.

How do you handle the transition from our current management company?

We handle the entire transition — document collection, financial cutover, vendor introductions, and resident notification. Most transitions complete in 30–60 days with zero gap in service. Your board does not manage the transition; we do.

What credentials does your team hold?

Our senior property managers hold Illinois real estate licenses. We are active members of the Community Associations Institute (CAI) and the National Association of Residential Property Managers (NARPM). Our team participates in ongoing education on Illinois condo law, the Chicago RLTO, and reserve study methodology.

How quickly will we hear back when we contact you?

Every inbound communication receives a substantive response within 4 business hours — not an auto-reply, a real answer from a real person. For after-hours emergencies, our 24/7 line is staffed by Angel, our receptionist, with immediate escalation to the on-call team.

What does Maintenance-Only service include?

Maintenance-Only includes 24/7 inbound tenant maintenance calls, work order dispatch, vendor coordination, repair documentation, and owner notifications. You keep control of leasing, rent collection, and tenant relationships. It is designed for self-managing landlords who want to eliminate the maintenance burden without giving up full control.

Do I have to pay management fees if my unit is vacant?

No. Our Full-Service rental management fees are based on collected rent. If a unit is vacant and not generating rent, you do not pay a management fee for that unit. We align our incentives with yours.

How quickly do you respond to tenant maintenance requests?

Angel handles all inbound maintenance calls 24/7. Routine requests are dispatched within one business day. Emergency requests — no heat, flooding, gas leak — are escalated immediately to the on-call team and our sister company, My Handyman Chicago.

What does your free rental analysis include?

A market-driven rental estimate for any Chicago property — comparable units currently on the market, recent lease comps, neighborhood trend data, and our recommendations on pricing and positioning. No sales call required. We send a written report, not a verbal estimate.

How is Altus different from other Chicago property managers?

Three things: we serve both associations and rental owners under one roof with equally deep expertise; we have a tiered service model (Finance-Only, Maintenance-Only) that no competitor offers in productized form; and our sister company, My Handyman Chicago, gives every client access to integrated maintenance without vendor markups. We are also investor-led — our principals own investment property, so we manage yours the way we manage ours.

Who needs to file Form 1099-MISC or 1099-NEC for rental income?

Landlords generally do not issue 1099-MISC or 1099-NEC to their tenants. Instead, landlords receive these forms from individuals or businesses that pay them $600 or more for services, such as property management companies, contractors, or attorneys. If you pay an unincorporated contractor $600 or more for services related to your rental property, you are generally required to issue them a 1099-NEC.

What is the difference between Form 1099-MISC and 1099-NEC for landlords?

Prior to 2020, non-employee compensation (payments to independent contractors) was reported on Form 1099-MISC. Starting in 2020, non-employee compensation is reported on Form 1099-NEC (Nonemployee Compensation). Form 1099-MISC is now used for other types of miscellaneous income, such as rents received by an attorney for space in their office, or prize money. Landlords primarily focus on 1099-NEC for payments made to contractors.

How do passive activity rules affect my rental income?

Rental activities are generally considered passive activities by the IRS, meaning losses from these activities can only offset passive income. If your passive losses exceed your passive income, you may not be able to deduct the excess losses in the current year. However, there are exceptions, such as for real estate professionals or if you actively participate and your modified adjusted gross income is below certain thresholds, allowing you to deduct up to $25,000 in passive losses.

Should I report my rental income on Schedule E or Schedule C?

Most landlords report rental income and expenses on Schedule E (Form 1040), Supplemental Income and Loss, for properties where they are not considered real estate professionals and do not provide substantial services to tenants. If you provide significant services to your tenants (like a hotel or bed and breakfast) or are a real estate professional, you might report your income on Schedule C (Form 1040), Profit or Loss from Business, which subjects you to self-employment taxes.

What are the basics of depreciation for rental properties?

Depreciation allows landlords to recover the cost of income-producing property over its useful life. For residential rental property, the IRS generally allows depreciation over 27.5 years using the Modified Accelerated Cost Recovery System (MACRS). You cannot depreciate the value of the land, only the building and other improvements. This non-cash expense reduces your taxable income, even if your property is appreciating in value.

When should a landlord consider hiring a CPA for rental income?

Hiring a CPA is highly recommended for landlords, especially those with multiple properties, complex financial situations, or those new to rental property ownership. A CPA can help navigate passive activity rules, optimize depreciation strategies, ensure compliance with IRS regulations, and identify all eligible deductions, potentially saving significant amounts in taxes and avoiding costly errors. They can also advise on state-specific tax implications.

Are security deposits considered taxable income?

Generally, security deposits are not considered taxable income when received if they are held in trust for the tenant and may be returned. They only become taxable income if and when they are forfeited by the tenant (e.g., to cover damages beyond normal wear and tear or unpaid rent). At that point, the portion of the deposit retained by the landlord must be reported as income.

What common deductions can landlords take to reduce taxable income?

Landlords can deduct a wide range of expenses to reduce their taxable rental income. Common deductions include mortgage interest, property taxes, operating expenses (utilities, repairs, maintenance), insurance premiums, advertising costs, legal and professional fees (including CPA fees), and depreciation. Keeping meticulous records of all income and expenses is crucial for maximizing deductions and simplifying tax preparation.

What is IRS Form 1099-K and how does it relate to rental income?

Form 1099-K, Payment Card and Third Party Network Transactions, is issued by payment processors (like PayPal, Stripe, or Venmo) if you receive payments through them. While primarily for goods and services, if tenants pay rent via these platforms and you meet the reporting thresholds (e.g., over $20,000 and more than 200 transactions, though this threshold can change), you might receive a 1099-K. This form reports gross transactions, and you still need to report your net rental income on Schedule E.

Can I deduct expenses for a home office used for my rental business?

Yes, if you use a portion of your home exclusively and regularly for your rental property business, you may be able to deduct home office expenses. This deduction can be calculated using either the simplified option (a standard deduction per square foot) or the regular method (allocating actual expenses like utilities, insurance, and depreciation based on the percentage of your home used for business). The home office must be your principal place of business or a place where you regularly meet clients/tenants.

Tax Guide · Updated 2026

1099 Rental Income Guide for Landlords

A comprehensive guide for landlords on understanding and reporting 1099 rental income, including forms, passive activity rules, depreciation, and when to seek professional tax advice.

$600+

1099-NEC Threshold

$25,000

Passive Loss Limit

27.5 Years

Residential Depreciation

Schedule E

Tax Form for Most

Disclaimer: This guide is for informational purposes only and does not constitute legal or tax advice. Tax laws are complex and subject to change. Consult a licensed CPA or tax attorney for guidance specific to your situation.

Understanding IRS Form 1099-MISC and 1099-NEC

As a landlord, you might encounter various IRS Form 1099s, primarily 1099-NEC and occasionally 1099-MISC. It's crucial to understand which form applies to your situation, both when you receive one and when you might need to issue one.

Form 1099-NEC (Nonemployee Compensation): This form is used to report payments of $600 or more made to non-employees for services performed in the course of your trade or business. For landlords, this most commonly applies to payments made to independent contractors for repairs, maintenance, or property management services. If you pay a contractor $600 or more in a calendar year, you are generally responsible for issuing them a 1099-NEC.
Form 1099-MISC (Miscellaneous Information): While previously used for nonemployee compensation, 1099-MISC is now used for other types of payments, such as rents (if you are a recipient of rent for office space, for example), prizes, awards, or other income payments. Landlords typically receive this form if they are paid rent by a business entity for commercial space, but generally do not issue it for residential tenants.

Accurate reporting ensures compliance with IRS regulations and helps avoid potential penalties. Always verify the correct form to use based on the nature of the payment.

Key Tax Considerations for Rental Property Owners

Managing rental properties involves several important tax considerations beyond just reporting income. Understanding these can significantly impact your tax liability and overall profitability.

Passive Activity Rules: The IRS generally classifies rental activities as passive. This means that losses from your rental properties can only offset passive income. If your passive losses exceed your passive income, you may not be able to deduct the excess losses in the current year, though they can often be carried forward. Exceptions exist for real estate professionals or those meeting certain active participation thresholds (up to $25,000 in losses).

Schedule E vs. Schedule C: Most individual landlords report their rental income and expenses on Schedule E (Form 1040), Supplemental Income and Loss. This is appropriate when you are not considered a real estate professional and do not provide substantial services to your tenants. If your rental activity is more akin to a business (e.g., short-term rentals with significant services, or you qualify as a real estate professional), you might report on Schedule C (Form 1040), Profit or Loss from Business, which can subject you to self-employment taxes.

Depreciation Basics: Depreciation is a critical deduction that allows you to recover the cost of your rental property over its useful life. For residential properties, the IRS mandates a 27.5-year recovery period. You can only depreciate the building and improvements, not the land. This non-cash expense reduces your taxable income, even if your property is increasing in market value, making it a powerful tax-saving tool.

Navigating these rules can be complex. Understanding your classification as a landlord and the implications for your tax forms is essential for accurate reporting.

When to Hire a CPA for Your Rental Business

While some landlords manage their own taxes, the complexities of rental property taxation often warrant professional assistance. A Certified Public Accountant (CPA) can provide invaluable expertise.

Complex Portfolios: If you own multiple rental properties, have properties in different states, or deal with various types of rental income (e.g., long-term, short-term, commercial), a CPA can help streamline your tax preparation and ensure all income and expenses are correctly allocated.
Navigating New Regulations: Tax laws, especially those related to real estate, can change frequently. A CPA stays up-to-date on the latest regulations, ensuring your filings are compliant and you're taking advantage of all available deductions and credits.
Optimizing Deductions and Depreciation: A skilled CPA can help you maximize legitimate deductions, including often-overlooked expenses, and develop an optimal depreciation strategy for your assets, significantly reducing your taxable income.
Avoiding Audits and Penalties: Incorrect or incomplete tax filings can lead to IRS audits and penalties. A CPA's expertise minimizes these risks by ensuring accuracy and proper documentation.
Strategic Financial Planning: Beyond annual tax filings, a CPA can offer strategic advice on property acquisitions, sales, refinancing, and overall financial planning to optimize your rental business's long-term tax efficiency.

Consider a CPA as an investment that can save you time, reduce stress, and ultimately increase your net income by optimizing your tax position.

Frequently Asked Questions

Simplify Your Rental Property Taxes

Don't let complex tax regulations overwhelm you. Altus Property Partners can connect you with trusted CPAs and provide comprehensive property management services to ensure your rental income is handled efficiently and compliantly.

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