Is rental income taxed?

[Jarred Black]

I know some landlords that manage their own properties and collect their rents personally. I know some that record this income on their taxes and some that don't. Should landlords file rental income on their taxes or not? I researched the IRS website and they say any rental income should be taxed at the landlords current income tax bracket.

[Paul S.]

Unfortunately @Jarred Black the first part of the tax code 26 U.S.C. § 1 imposes the income tax 26 U.S.C. § 61 and § 63 go into further detail. 63 talks about your gross income minus the allowable deductions. 61 defines what income is. Specifically gross income means all income from whatever source derived, including (but not limited to) the following items: (look at 2,3,and 5)

(1) Compensation for services, including fees, commissions, fringe benefits, and similar items;
(2) Gross income derived from business;
(3) Gains derived from dealings in property;
(4) Interest;
(5) Rents;
(6) Royalties;
(7) Dividends;
(8) Alimony and separate maintenance payments;
(9) Annuities;
(10) Income from life insurance and endowment contracts;
(11) Pensions;
(12) Income from discharge of indebtedness;
(13) Distributive share of partnership gross income;
(14) Income in respect of a decedent; and
(15) Income from an interest in an estate or trust

I am not a lawyer (would not admit it if i were) but I did sleep at a Holiday Inn last night. Really I wrote a paper about this for a class on Government a while ago.