Rental Property Taxes in Cincinnati: What Landlords Miss
Depreciation, repairs vs. improvements, and the local municipal filings that trip up new landlords.
Rental real estate is one of the most tax-advantaged investments in the country — if you handle the paperwork right. Cincinnati landlords have some specific quirks to navigate on top of the federal rules. Here's what we walk every new rental client through in the first meeting.
Depreciation is not optional
Every residential rental gets depreciated over 27.5 years on the building portion (land isn't depreciable). Whether or not you claim it, the IRS treats you as if you did when you sell — so skipping it just costs you the deduction without avoiding the recapture. If you've owned a rental for years and never depreciated, Form 3115 can catch you up in a single year without amending prior returns.
Repairs vs. improvements — the line that matters most
- Repairs (patching a roof, painting, fixing a faucet) are deducted 100% in the year you pay them.
- Improvements (new roof, new HVAC, kitchen remodel) are capitalized and depreciated — usually over 27.5 years for structural, 5–15 years for appliances and land improvements.
- The safe-harbor election lets you expense any single item under $2,500 as a repair, even if it looks like an improvement. Use it every year.
Passive loss rules — and the two ways around them
Rental losses are usually "passive" and can only offset passive income. Two escape hatches:
- $25,000 special allowance — if you actively participate and your AGI is under $100,000, you can deduct up to $25,000 of rental losses against ordinary income. Phased out fully at $150,000.
- Real estate professional status — 750+ hours and more than half your working time in real estate. Meets the bar and losses become non-passive without limit. This is scrutinized; document your hours contemporaneously.
The Cincinnati-specific filings
- Cincinnati and RITA municipal net profit — rental income is generally taxable at the city level if the property is in a taxing city. File the city return even if you have a loss.
- Hamilton and Clermont County property tax — reassessed every three years, and challenging the valuation is often worth the hour it takes. Deadline to file a Board of Revision complaint is March 31.
- Ohio short-term rental sales & lodging taxes — Airbnb collects some but not all. If you rent short-term, register with the Ohio Department of Taxation and the county visitor bureau.
How we help landlords
Whether you own one duplex or a portfolio of small multifamily properties, we handle rental returns, cost-segregation coordination, city filings and BOR complaints. Come in with a closing statement and last year's return and we'll tell you within an hour where the biggest savings are.
