If you own a rental home in Clarksville, near Fort Campbell, or elsewhere in Tennessee, you may be able to deduct many of the ordinary and necessary costs of operating that property on your federal tax return.
The deductions most commonly associated with rental property include mortgage interest, insurance, property taxes, repairs, management fees, advertising, HOA dues, qualifying travel, and depreciation. However, the treatment can change depending on how you use the property, how it is owned, when it was placed in service, and whether an expense is considered a repair or an improvement.
Haus expert contribution: Su Whetsell, Haus Property Management Director.
This article provides general information only. It is not tax advice, legal advice, or accounting advice. Please confirm your specific situation with a qualified CPA or tax professional before filing your 2026 return.
What rental property tax deductions can Clarksville landlords generally claim in 2026?
Most individual landlords report residential rental income and expenses on Schedule E of Form 1040. The IRS generally allows deductions for expenses connected to managing, conserving, maintaining, and operating an income-producing rental property.
Here are the deductions Clarksville and Fort Campbell-area landlords should review with their CPA.
1. Mortgage interest, but not mortgage principal
The interest portion of a loan used to purchase, refinance, or improve a rental property is generally deductible as a rental expense.
The principal portion of your monthly mortgage payment is different. Principal reduces your loan balance, so it is not generally deducted as a current operating expense.
Keep your annual mortgage statement and loan records. If you refinanced the property or used loan proceeds for personal expenses, your CPA may need to allocate the interest between rental and non-rental use.
2. Clarksville and Montgomery County property taxes
Property taxes paid on a rental home are generally deductible as a rental expense when properly allocated to the property.
For a Clarksville rental, review:
- Montgomery County property taxes
- City of Clarksville taxes, where applicable
- Supplemental or special assessments
- Property taxes paid through an escrow account
- Taxes paid at closing or reimbursed to the seller
Do not assume that every charge labeled as a tax receives the same treatment. An assessment that increases the property’s value may need to be capitalized rather than deducted immediately.
Tennessee does not impose a broad state individual income tax on wages and ordinary earned income, but local property taxes still affect your investment return. Tennessee’s tax structure does not eliminate your federal rental-income filing obligations or federal income tax.
3. Landlord insurance and other property-specific coverage
Premiums for insurance connected to the rental property are generally deductible operating expenses. This may include:
- Landlord or dwelling insurance
- Hazard coverage
- Liability coverage
- Flood insurance, if applicable
- Umbrella coverage allocated to the rental activity
- Insurance required by your mortgage lender
If you pay an insurance premium covering more than one year, you may need to allocate the deduction over the coverage period instead of deducting the entire payment at once.
4. Repairs and maintenance versus improvements
This is one of the most important distinctions for landlords.
Repairs and maintenance
A repair generally keeps the property in its existing condition without materially improving it, extending its useful life, or adapting it to a new use. Qualifying repairs are generally deducted in the year paid.
Common examples may include:
- Patching drywall
- Touch-up painting
- Repairing a leaking faucet
- Replacing a broken window
- Servicing an HVAC system
- Pest control
- Minor plumbing or electrical work
- Routine lawn care
- Cleaning between tenants
- Small roof repairs
Improvements
An improvement generally adds value, restores the property, extends its useful life, or adapts the property to a different use. Improvements are usually capitalized and recovered through depreciation rather than deducted in full during 2026.
Examples may include:
- Replacing an entire roof
- Adding a bedroom or bathroom
- A substantial kitchen remodel
- Installing a new HVAC system
- Building a fence or driveway
- Major flooring or structural work
- Extensive landscaping or drainage improvements
The IRS discusses these distinctions in Publication 527, Residential Rental Property. Ask your CPA how to document invoices, labor, materials, and the business purpose of each project.
5. Depreciation over the residential rental recovery period
Depreciation allows you to recover the cost of qualifying income-producing property over time. For most residential rental buildings depreciated under the General Depreciation System, the recovery period is 27.5 years.
Generally, you depreciate the building and qualifying improvements, but not the land. Your CPA may need to allocate the purchase price between the land and the structure before calculating depreciation.
Depreciation typically begins when the property is placed in service, meaning it is ready and available for rent. That may occur before a tenant moves in if the home is rent-ready and actively marketed.
You may also depreciate certain qualifying items separately, such as:
- Appliances
- Carpeting
- Furniture used in the rental
- Fences
- Certain land improvements
- Capital improvements
The 2026 treatment of individual assets, bonus depreciation, and any available elections can depend on the property type, ownership structure, placed-in-service date, and current federal law. Do not calculate depreciation from the purchase price alone. Maintain your closing statement, improvement records, prior depreciation schedules, and property basis information.
6. Mileage and travel to manage the property
You may be able to deduct qualifying transportation and travel expenses incurred to inspect, maintain, conserve, or manage your rental property.
For example, a Clarksville landlord may have business-related travel for:
- Inspecting a rental near Fort Campbell
- Meeting a contractor
- Purchasing maintenance materials
- Checking on a vacant property
- Meeting a property manager
- Completing a move-in or move-out inspection
You generally need contemporaneous records showing the date, destination, mileage or travel cost, and business purpose.
You may use the IRS standard mileage method or actual vehicle expenses when permitted. Check the current IRS guidance for the applicable 2026 rate and recordkeeping requirements.
Ordinary commuting is not automatically a rental deduction. Travel primarily undertaken to improve the property may also be treated differently because improvement costs are generally capitalized rather than deducted as current travel expenses.
7. Professional services and management fees
Fees paid to professionals for rental-related services are commonly deductible operating expenses. These may include:
- Property management fees
- Leasing and tenant-placement fees
- Renewal fees
- Legal fees for leases or evictions
- Accounting and bookkeeping fees
- Tax preparation fees related to Schedule E
- Contractor or maintenance coordination fees
- Property inspection fees
- Rental-specific software and accounting systems
If you self-manage, you generally cannot deduct the value of your own unpaid labor. You can, however, generally track and deduct qualifying third-party costs associated with managing the property.
Haus’s Clarksville property management guide explains how professional management can support marketing, tenant screening, maintenance coordination, rent collection, lease administration, and owner reporting.
8. Advertising, marketing, and tenant-placement costs
Expenses used to market a rental property are generally deductible when they are ordinary and necessary for the rental activity.
Potential examples include:
- Online rental listings
- Professional photography
- Yard signs
- Digital advertising
- Tenant-screening fees
- Application-processing costs
- Showing-related services
- Lease-up marketing
Keep copies of invoices, receipts, and the property connected to each expense.
9. HOA dues and association fees
Regular HOA or condominium dues connected to a rental property are generally deductible operating expenses.
Be careful with special assessments. A routine assessment for maintenance may be treated differently from an assessment used to fund a new roof, major exterior renovation, parking improvement, or another capital project. Capital assessments may need to be added to the property’s basis and depreciated.
Review the association’s description of the charge before categorizing it.
What other rental expenses should Clarksville landlords track?
Depending on the property and lease terms, you may also need to track:
- Utilities paid by the owner
- Water, sewer, and trash service
- Cleaning and turnover costs
- Lawn care
- Pest control
- Bank and payment-processing fees
- Rental-specific office supplies
- Security and monitoring services
- Permits and licenses
- Maintenance materials
- Interest on qualifying rental-related loans
The IRS provides an overview of rental income and expenses in Topic No. 414.
What tax records should you keep?
A strong recordkeeping system can help your CPA determine which costs are deductible now and which must be capitalized.
Keep:
- Settlement statements
- Mortgage interest statements
- Property-tax records
- Insurance declarations and invoices
- HOA statements
- Contractor invoices
- Receipts for supplies
- Mileage logs
- Travel records
- Advertising invoices
- Management statements
- Lease-related legal invoices
- Improvement records
- Depreciation schedules
- Closing documents from refinances or sales
Separate each rental property’s income and expenses whenever possible. Clear records are especially valuable if you own multiple homes, use a property manager, or convert a former personal residence into a rental.
What Tennessee landlord disclosure should appear in lease documentation?
Tennessee law, TCA § 66-28-302, requires the landlord or the landlord’s agent to disclose the name and address of the property owner or the owner’s agent.
For active lease agreement documentation, include the true name and address of the property owner or authorized management agent and keep the information current if ownership or management changes. Have your lease documents reviewed by a qualified Tennessee attorney or property-management professional.
How can Clarksville landlords improve their tax preparation process?
Start before year-end rather than waiting until tax filing season. Review your income and expenses by property, separate repairs from improvements, confirm your depreciation records, and gather mileage and travel documentation.
If you are evaluating a new rental purchase, review Haus’s Clarksville rental-property investment guide to consider how taxes, insurance, maintenance, financing, vacancy, and management costs affect projected returns.
Haus is committed to helping rental owners across Tennessee and Kentucky make informed, practical decisions. Contact the Haus team to discuss property management, rental operations, or your next Clarksville investment.
General information only: This article is not tax or legal advice. Federal tax rules can change, and each owner’s treatment depends on individual facts. Please confirm all deductions, depreciation, travel expenses, passive-loss limitations, and filing requirements with your CPA.
