Can I claim expenses on Schedule E when relative paid for rental property costs?

Your situation isn't as unique as you might think! The key factor here is determining if these payments were gifts or loans. If your uncle paid these expenses as gifts to you (with no expectation of repayment), then you as the property owner can claim these expenses on your Schedule E. The IRS generally looks at who owns the property, not who physically paid each bill. Think of it this way - your uncle gave you a gift of $4,600, and you used that gift to pay rental expenses. However, if there's any expectation that you'll repay your uncle, that would be considered a loan arrangement, not a gift. In that case, your uncle wouldn't get any deduction (he just made a personal loan), and you could still deduct the expenses as the property owner when you repay the loan. Documentation is important here. While it wasn't formally documented as a gift, I'd recommend getting something in writing from your uncle clarifying his intention with these payments. This will help if you're ever audited.

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I think everyone's missing an important point here. If your relative paid $4,600 for your rental property expenses, that could potentially count toward the annual gift tax exclusion limit. For 2025, the gift tax exclusion is $18,000 per person, so your uncle would be fine, but it's something to consider if the amounts get larger or if he's making other gifts to you. Also, make sure you're not counting the expenses twice. The property management company probably already deducted their fees from the rental income before sending you the 1099. You'll want to carefully look at what expenses are already accounted for versus what additional expenses your uncle covered.

What tax software are you using? I had this EXACT scenario last year with my beach condo (family member paid expenses) and TurboTax handled it perfectly. There's a specific section where you can enter expenses you paid, and it clearly separates those from the income reported on the 1099. Just make sure to document the gift nature of the payments somewhere in your records.