What this line means
Fees paid to agents, property managers, or platforms for finding tenants or facilitating rental transactions. This includes real estate agent commissions for securing a lease, finder’s fees, leasing agent fees, and service charges from short-term rental platforms like Airbnb or Vrbo. The full commission is deductible in the year paid.
Does this apply to you?
- You pay a real estate agent or leasing agent a commission for finding tenants
- You use Airbnb, Vrbo, or another platform that charges a host service fee
- You pay a referral fee to someone who brings you a tenant
- You paid a rental listing service a fee based on a percentage of rent collected
Easy to overlook
Short-term rental platform fees belong on this line Airbnb charges hosts a 3% service fee (or higher under some pricing models) on each booking. Vrbo charges similar fees. These are commissions, not general expenses. When the platform issues a 1099-K for gross booking revenue, the service fee is the difference between the 1099-K amount and what was deposited to your bank account. Deducting the platform fee on line 8 reconciles the 1099-K with your net income. 1 IRS Publication 527 — Residential Rental Property
Leasing commissions for multi-year leases are fully deductible in year one If you pay a broker a one-month commission for securing a two-year lease, the entire commission is deductible in the year paid. You do not amortize it over the lease term. Landlords who pay large commissions for commercial or long-term residential leases sometimes spread the deduction unnecessarily. 2 General filing pattern — Airbnb service fees not deducted
Watch out for this
Confusing rental commissions with sales commissions. If you sell a rental property, the real estate agent’s sales commission is not deductible on Schedule E. It reduces your gain (or increases your loss) on the sale, reported on Form 4797 or Schedule D. Only commissions related to renting the property go on line 8.
Footnotes
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IRS Publication 527, Residential Rental Property, Rental Expenses. https://www.irs.gov/pub/irs-pdf/p527.pdf ↩
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IRS Publication 527, Residential Rental Property, Commissions. https://www.irs.gov/pub/irs-pdf/p527.pdf ↩