Rental Property Tax Return Preparation

By Jason Watson, CPA

We get asked often, “What do you need to prepare my rental property tax returns?” Or, “what should I be recording or keeping track of throughout the year?” We created a template called the Simplified Rental Operations (SRO) Worksheet. While spreadsheets and templates are only meaningful to the spreadsheet designer, you might find value and some helpful hints.

Here is the link to our SRO-

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Here is also a checklist of all the things we need beyond revenue and expenses for the preparation of your individual tax returns (Form 1040) including your Schedule E rental property activities-

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This assumes you are reporting your rental properties on your individual tax returns. If you are leveraging a multi-member LLC taxed as a partnership where your activities are reported on Form 8825, here is our business entity tax return checklist-

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Even if you don’t use WCG CPAs & Advisors, you might find these tools helpful.

WCG Fee Structure

We pride ourselves on being transparent and having a simple fee structure. Most business services and tax returns will fit into the fees described below. Sure, there’s always the outlier or the unusual situation, but the following information gives you an idea of our philosophy. We only have time on this earth to sell, and we cannot inventory it. Our fees are an attempt to coincide with expected time spent and the value received.

Individual Tax Prep

Our starting fee is $800 for standalone jointly-filed individual tax returns (Form 1040). Most are $800 to $1,000. However, we also have FasTrac 1040 at $525 and a fee range of $250 to $400 for children and students depending on your tax footprint.

Small Biz, LLCs, Rentals Tax Prep

Small businesses are commonly reported on your individual tax return on Schedule C. Rental activities are reported on Schedule E. Typical fee range is $800 to $1,000 for those with 1-2 rentals or one side business.

As with anything in life, things change, so please refer to our most recent fees on our website-

wcginc.com/fee

And specifically our rental property tax return preparation page-

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Rental Setup Fees

If you are new to WCG CPAs & Advisors, or if you have recently acquired a rental property, here are typical set up fees-

Rental Setup, Existing Rental Prior to 2024 (unless nutty asset listing)	125 ea
Rental Setup, New Rental Purchased in 2024 (yay!)	200 ea
Rental Setup, New Short Term Rental Purchased in 2024	250 ea
Add On: Cost Seg Setup, New Rental in 2024	150
Add On: Cost Seg Setup + 3115, Existing Rental Prior to 2024	450
Add On: 3115 only	375
Add On: Rental Acquired in a 2024 1031 Exchange	250
Add On: Rental Acquired before 2024 in a 1031 Exchange	350
Add On: Commercial, Several Assets, Overall Nuttiness	varies

Ok, neat. Should we run through some examples?

Rental Setup Examples

You are new to WCG (yay) and you purchased a rental property in 2024 that is a short-term rental and you did a cost segregation study as well. Your setup fees would be $250 + $150 = $400.

You are new to WCG (double yay), and you purchased a rental property in 2024 through a 1031 like-kind exchange and you did a cost seg as well. Your setup fees would be $125 + $150 + $250 = $525.

You are new to WCG (more yay) and you have 2 existing rentals with 1 as an STR, and you acquired one of the rentals with a 1031 like kind exchange a few years ago. Your setup fees would be $125 x 2 + $350 = $600.

You are new to WCG (we sense a theme!) and you have 3 existing rentals with 2 as STRs, and you did 1 cost segregation study today on a rental property that has been in service since 2022 (and therefore you also need a Form 3115 Change in Accounting Method). Your setup fee would be $375 + $450 = $825.

Yes, we can offer some discounts or economies of scale.

Why Have Setup Fees?

Why do we have setup fees at all? We must ensure your prior depreciation is correct (especially if acquired with a 1031 exchange), all assets are correctly identified with original cost basis including acquisition costs, and loan amortization is properly recorded. We see a lot of junk out there which is not big deal until you want to sell the rental property, and minimize your tax pain.

Why do we charge extra for short-term rental setups? They are more intensive because there are more questions that need to be answered from us (and from you!), and we must comb through furnishings and other boot up expenditures to ensure they are properly handled.

Why would I need a 3115 with a cost segregation study? If your rental property has already been in service and tax returns have been filed, then we need to request permission from the IRS to basically accelerate your depreciation on your current tax return. Alternatively, we could amend your prior tax returns which is messy and expensive. Also, there is some tax arbitrage potentially if your income is higher today than it was when you first purchased your rental property. Lots to discuss here!

Why do we charge extra for a rental property acquired in a prior year 1031 like-kind exchange? We need to confirm that the previous tax professional computed the exchange correctly since once we prepare the tax return, we own the data including prior data.

Rental Property Tax Return Preparation

Here are typical rental property tax prep fees that might be added to your individual tax return (Schedule E reported on Form 1040) or partnership tax return (Form 8825 reported on Form 1065). Base fees are $800 for individual tax returns (Form 1040) and $1,000 for partnership tax returns (Form 1065). Each tax return includes one rental activity. The following are add-ons-

Rental Tax Prep, Long-Term, Clean Records (The SRO Template)	100 ea
Rental Tax Prep, Short-Term Rental (STR Loophole)	150 ea
Rental Tax Prep, Complex or Messy Records	200 ea
Add On: Streamlined State Tax Return (in addition to your resident state)	125
Add On: Complex State Tax Return (requiring business or gross receipts filings)	200
Add On: Cost Seg + 3115	550
Add On: Rental Property Sale	250
Add On: 1031 Like-Kind Exchange and New Setup	500
Add On: Complex 1031 (2:1, 1:2) and New Setup(s)	750

Rental Tax Prep Examples (in addition to set up fees above)

You purchased a rental property in 2025 that is a short-term rental and you did a cost segregation study as well. Your recurring tax prep fees would be just the base fee since the first rental is included in our base fee.

You have 2 existing rentals with 1 as an STR, and you acquired one of the rentals with a 1031 like kind exchange a few years ago. Your books and records are impeccable. Your recurring tax prep fees would be base fee plus $150.

You have 3 existing rentals with 2 as STRs. Your rental property records are incredibly tight and you use our SRO template, and therefore your recurring tax prep fees would be base fee plus $150 + $100.

You are a returning client to WCG (thank you) and you had a long-term rental from 3 years ago and you recently converted it to a short-term rental in 2025, and you also performed a cost segregation study so you need a Form 3115 Change in Accounting Method). Your tax prep fees would be just the base fee since the first rental is included in our base fee.

There are a million different examples, and Yes, some of this is based on the judgement such as clean records versus messy records (no, not you, of course not, right?). Please keep in mind that our base tax return preparation fee includes rental #1. Also, we will offer discounts for several rentals such as 6 or more.

State Tax Returns

You live in Colorado and have a rental property in California. You will need to file a California non-resident tax return even if the rental loses money. You have an income-generating asset in their state. Also, please consider that a taxing jurisdiction has the right to inspect your books and records to ensure your loss is truly a loss.

Keep in mind that some states and cities consider rental properties to be business ventures like any other, and more are focusing on short-term rentals as well. What makes things worse is that some taxing jurisdictions will impose an income tax based on gross rental receipts regardless if the activity is profitable. Yuck.

Partnerships, Real Estate Hold Co

Our starting fee is $1,500 for partnership (Form 1065) and corporate tax returns (Form 1120 and 1120S) depending on the quality of your accounting records (most are $1,500 to $1,800).

However, for rental property holding companies filing a partnership tax return, our fees are reduced to $1,000 to $1,200.

Business Formation

We can create a business or a real estate holding company for $625 plus the state filing fees. Includes Articles and employer identification number (EIN).

For our most current fee structure, please refer to-

wcginc.com/fee

Partnerships, Real Estate Hold Co

Our starting fee is $1,500 for partnership (Form 1065) and corporate tax returns (Form 1120 and 1120S) depending on the quality of your accounting records (most are $1,500 to $1,800).

However, for rental property holding companies filing a partnership tax return, our fees are reduced to $1,000 to $1,200.

Business Formation

We can create a business or a real estate holding company for $625 plus the state filing fees. Includes Articles and employer identification number (EIN). Please visit our most current fee structure.

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