What is a Rental agreement?

A rental agreement is a legally binding contract between a property owner and a tenant that specifies the terms, conditions, rental rate, duration, and responsibilities for the use of real property. For tax purposes, rental agreements constitute arm's-length business transactions that support the deductibility of rental expenses. Under the Augusta rule, a written rental agreement between a business entity and property owner is essential documentation for claiming tax-free rental income up to 14 days annually.

Related Terms

What is the Fair market rental value?

What is the Augusta rule?

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Tax loss harvesting

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Child traditional IRA

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Child & dependent tax credits

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Employee achievement

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Work opportunity tax credit

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Hiring kids

Reduce taxable income & self-employment tax by hiring your kids.

Home office

Deduct qualified expenses for using your home for business purposes.

Meal expenses

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Travel expenses

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Vehicle expenses

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Late S election

A Late S Election lets a corporation request IRS S corp status post-deadline.

Late C election

A Late C Election is a request to the IRS for C corporation status after the deadline.

Depreciation

Put your fixed assets to work for you by utilizing depreciation to find and compare tax savings in minutes.

R&D tax credit

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Clean vehicle

Businesses and Individuals can receive a tax credit for purchasing new eco-friendly vehicles. Individuals may also qualify on used eco-friendly vehicles.

Residential clean energy

Taxpayers who invest in renewable energy improvements for their home or second home may qualify for a credit to lower their income tax.

Augusta rule

The Augusta Rule lets homeowners rent their property tax-free for up to 14 days a year without reporting the income.

Roth 401k

Roth 401(k) lets employees and individuals make after-tax retirement contributions, offering tax-free growth and withdrawals.

Traditional 401k

Traditional 401(k) plans offer pre-tax retirement savings for employees, with companies reducing taxable income via contributions.