Who We Work With
CPA for Rental Property Owners in San Antonio
Rental property is one of the most common ways San Antonio households build wealth, and one of the most commonly mishandled areas of a personal return.
The deductions are real and generous. They are also easy to get wrong in ways that surface years later, usually on a sale.
Who this is for
- Owners of one or more long-term rental properties
- Short-term rental hosts operating in and around San Antonio
- Accidental landlords renting out a former primary residence
- Investors weighing a purchase, a sale, or a 1031 exchange
Depreciation is not optional
Residential rental property is depreciated over 27.5 years, and this is one of the largest deductions most landlords get. It is also the one most often mishandled.
The critical point owners miss: when you sell, the IRS calculates depreciation recapture on the depreciation you were allowed to take — whether or not you actually took it. Skipping it does not avoid the tax later; it just forfeits the deduction now. If prior returns missed it, that is usually correctable.
Repairs versus improvements
A repair is deductible in the year you pay for it. An improvement has to be capitalised and depreciated over years. The line between them is narrower than most owners assume, and the tax difference is substantial.
Fixing a broken water heater and replacing the entire plumbing system are treated very differently, even though both feel like maintenance when you are writing the cheque.
Short-term rentals follow different rules
Short-term rentals are not simply long-term rentals with more turnover. Once average guest stays get short enough, the activity may stop being treated as a rental at all for tax purposes — which changes how losses can be used and can bring self-employment tax into play if you provide substantial services.
Material participation rules matter here too, and they are one of the few areas where the amount of personal time you put in genuinely changes the tax outcome. San Antonio also has its own permitting requirements for short-term rentals, which sit alongside the tax questions rather than replacing them.
The Texas angle
No state income tax is a real advantage for landlords here. Texas property taxes, however, are among the higher ones in the country, and they are a significant line item in any rental's economics.
Property tax treatment differs between a rental and a homestead, so converting a former primary residence into a rental has consequences on both sides of the ledger. Worth planning before the conversion rather than after.
Common questions
- I have never claimed depreciation. Can I fix that?
- Usually, yes — and you should, because recapture on sale is calculated on depreciation allowed, not just depreciation taken. There is a defined procedure for correcting it. Bring your prior returns and we will look.
- Can I deduct a loss on my rental?
- Sometimes. Passive activity loss rules limit it for many owners, with exceptions tied to income level and to how actively you participate. Short-term rentals sit under a different analysis again.
- Do I need to report income from renting out a room?
- Generally yes, and there are specific rules for properties that are part personal-use and part rental. Expenses have to be allocated between the two.
- I rented out my old house instead of selling. What changes?
- Quite a lot. The property converts to business use at its own basis rules, depreciation begins, and the capital gains exclusion you would have had on a primary residence is time-limited. It is worth understanding the clock before it runs out.
This page is general information, not individualised tax advice. Tax rules change and every situation differs — please speak with us before acting on anything here.