Rental property: the records to keep through the year

Reviewed November 2026 by LAS CPA, PC. The rules behind each line are in our guide to rental property taxes in Northern Virginia.

Each time money comes in

Rental income is any payment you receive for the use of the property, and more than the monthly rent counts. For each payment, write down the date, the property, who paid and what it was for.

• Rent, by month and by property.
• Rent paid ahead of time. Advance rent is income when you receive it.
• A payment to end a lease early.
• A bill the tenant paid for you, such as a repair the tenant covered.
• Security deposits in a separate column. A deposit you're obligated to return isn't income when you receive it. Any part you keep becomes income when you have the right to keep it.

Each time money goes out

Keep the receipt or the invoice, and note the property it belongs to. The expense lines on the federal rental schedule are the simplest set of categories to sort by, and the tracker uses them.

• The everyday expenses: advertising, auto and travel, cleaning and maintenance, commissions, insurance, legal and professional fees, management fees, mortgage interest, repairs, taxes and utilities.
• An invoice that says what the work was. A repair is deducted in the year you pay for it. Work that betters the property, restores it or adapts it to a new use is an improvement, and an improvement is added to the property's cost and written off over years. The invoice's description is what shows which one you paid for.
• Small purchases. By election, purchases of up to $2,500 per invoice or item that your books treat as expenses can be deducted in the year. This takes accounting procedures in place at the start of the year that treat those purchases as expenses, and an election statement attached to each year's return.
• The date and cost of each appliance, carpet and piece of furniture. In a residential rental these are 5-year property. Fences and shrubbery are 15-year property. Each one gets its own line in the depreciation schedule.
• Each trip you drive for a rental. Write down the date, where you went, why and the miles, at or near the time of the trip. Keep the total miles for the year as well.
• What a refinance paid for. If you refinance for more than the old balance, the interest on the part of the loan not used for the rental generally can't be deducted as a rental expense. Keep the closing statement and a note of where the extra cash went.

A running count of days

• Days rented and days of personal use, for any property you or your family also use. If a home you use personally is rented fewer than 15 days in the year, the rent isn't reported and the rental expenses aren't deducted. At 15 days or more, the expenses are split between the two uses.
• The length of each stay, for a property rented by the night or the week. When the average stay is 7 days or less, the loss rules stop treating it as a rental activity.

A running count of your hours

Three rules turn on what you do yourself, and they ask for different proof.

• Your ownership share and what you decide yourself. Up to $25,000 of rental loss can offset other income when you actively participate and own at least 10% of the property. The allowance shrinks as modified adjusted gross income passes $100,000 and is gone at $150,000. For married people filing separately who lived apart all year, the allowance is $12,500 and starts shrinking at $50,000.
• Your hours by date and task if you or your spouse work mostly in real estate. The real estate professional tests ask for more than 750 hours and more than half of your working time, and material participation generally asks for more than 500 hours. For these, any reasonable proof will do, such as an appointment book, a calendar or a narrative summary.
• A log written as the work happens if you want the 20% deduction's safe harbor. The deduction is up to 20% of the income from a business, and an IRS safe harbor treats a rental as a business when its conditions are met. It asks for separate books and records for the rental and for 250 or more hours of rental services a year, or in any three of the five tax years ending with this one once the rental has been running at least four years. Here the IRS wants records made at the time: the hours, a description of the service, the date and who did it.

From the day the property became a rental

• The purchase closing statement and the split between land and building. The building is depreciated over 27.5 years. The land isn't depreciated at all.
• The value of a former home on the day it became a rental. Depreciation starts from the lower of that fair market value and your adjusted basis on the conversion date.
• The Form R-5 registration for an owner who lives outside Virginia. Nonresidents who rent out Virginia real estate register with Virginia Tax, and the rent is Virginia income.
• Every year's depreciation schedule. When you sell, your basis comes down by the depreciation you took or could have taken. Missed depreciation may still be claimed through an amended return or a change in accounting method.

Once a year

• The year-end statements: mortgage interest, property tax and insurance.
• Last year's return. Form 4562 carries the depreciation and Form 8582 carries any rental losses that were disallowed and carried forward.

• Sources: IRS Publication 527 (2025), Publication 925 (2025) and Publication 544 (2025); the IRS page on the tangible property final regulations; Rev. Proc. 2019-38; Virginia Tax's pages on residency and on the registration of nonresident property owners.

This list is general information, current as of November 2026. It isn't advice for your situation, and it doesn't cover what a lease or Virginia's landlord and tenant law requires.