It is important that you keep clear and concise records of the rental income and expenses so that the potential buyer is able to analyze the information in making an informed decision. Usually, your income tax return will suffice.
The IRS complicates the area of selling rental property by throwing in some twists that make it different than selling a home. Here are the main ones that you need to be concerned about:
IMPORTANT NOTE: Consult your tax professional to determine how these rules will impact the sale of your rental property.
SUGGESTION: Sales of rental property are reported on IRS Form 4797—Sale of Business Property.