accounting services

How We Help Owners with Their Tax Obligations

DenCO Property Management & Sales believes the relationship between owners and property management companies requires trust, transparency, and accountability. Owners entrust us to handle rental income, reserve funds, security deposits, and write checks on the owners’ behalf. We help owners meet their tax obligations by supplying monthly income reports and a list of annual property expenses that allows them to file their taxes on time.

Owners should work with their tax service or CPA to determine the tax benefits and write-offs for each property they own. Typically, owners can reduce their rental income by subtracting qualified deductible expenses. DenCO collects and files all repairs and maintenance receipts required to keep each property in good working condition. We send the owners original receipts for work done at their property at the end of the year.

Property managers spend money on the owners’ behalf for upkeep and repairs. Some of the most common property expenses include:

  • Advertising
  • Cleaning and maintenance
  • Depreciation
  • Homeowner association dues and condo fees
  • Insurance premiums
  • Interest expenses
  • Local property taxes
  • Management fees
  • Pest control
  • Equipment rentals
  • Repairs
  • Trash removal fees
  • Yard maintenance

 

What Are Important Property Management Deliverables at Tax Time?

DenCO’s document management process provides a clear audit trail for all income and expenses associated with each property. At tax time, we provide our owners with a 1099 MISC form and a summary of all expenditures for each property backed up with original receipts. Our deliverables are:

  1. Monthly Income Statement: Each month, we deposit net rent minus management fees and any expenses.
  2. Payment: We pay owners on the 10th of each month.
  3. Tax Forms: We provide owners with a 1099 MISC form for each property.
  4. Project Management: We meet contractors on-site to supervise any repair work. 
  5. Significant Repairs: DenCO reaches out to the owner to arrange payment for any repairs or appliance replacements that cost more than a month’s rent.
  6. Original Receipts: We send our owners original receipts for work done at their property at the end of the year. 

Repair and Replacement Analysis

Sometimes replacing an appliance, mechanical system, or fixture is more cost-effective than repairing. The collection of receipts over a year can uncover repair patterns and track a property’s health. DenCO would recommend replacing items that need constant repairs. We work with some of the best service companies in Denver that offer reliable replacement/repair services. 

The right property management firm can add value to the property, ensure efficient operations, and deliver timely income and expense information to the owners to file their taxes on time.