Rental income must be reported on tax returns, with related expenses deductible. Expenses are either current (fully deductible in the year incurred) or capital (amortized over several years). Rental income can be classified as rental or business income based on rental terms. Rental losses can offset other income, but depreciation cannot be deducted if already in a loss position. Losses from renting below market value to family are not deductible. Ownership structure affects reporting.