Tax deductions from rental property
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    Tax deductions from rental property

    Are these significant?


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    Re: Tax deductions from rental property

    In what way?


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    Re: Tax deductions from rental property

    I guess it depends on whether or not you are losing your *** in the process.



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    Re: Tax deductions from rental property

    I guess that depends on how much money you spend on repairs, utilities, property taxes, insurance etc.



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    Re: Tax deductions from rental property

    Are they significant? Yes.

    You need to define "rental property" first. I rent out half my house. I get tax deductions for what I spend on the rental half, and at least partial deductions for shared areas (i.e., lawn care). The good part of this is that since it is also my primary residence, I do not have to show a profit every so often, I can take a loss every year. If the rental property is not your primary residence, then you are running a business, and need to show a profit something like 2 out of 7 years.



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    Re: Tax deductions from rental property

    They definately add up. Why are you asking the question? There are a lot of deductible expenses with rental property. Examples: mortgate interest, property taxes, advertising, repairs, etc. On top of these, you have depreciation on the building and all the associated items such such as appliances, carpet, hot water heater, etc.


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    Re: Tax deductions from rental property

    Years ago we couldn't sell our house after moving so we rented it. The main tax benefits were in terms of depreciation. We accelerated depreciation and, for a while, had advantageous cash flow. But, when did sell, we had to recapture much of what we depreciated - not nice.


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    Re: Tax deductions from rental property

    Quote Originally Posted by BenEClone View Post
    Years ago we couldn't sell our house after moving so we rented it. The main tax benefits were in terms of depreciation. We accelerated depreciation and, for a while, had advantageous cash flow. But, when did sell, we had to recapture much of what we depreciated - not nice.
    yeah that's one of the downsides. Currently the IRS has a 250,000 exemption on paying taxes on the gains when selling your personal home. If you're planning on selling significantly above cost (unlikely given housing market, but possible I guess) I would definately sell rather than rent.



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    Re: Tax deductions from rental property

    There are no real deductions for rental property, but you can use the expenses of owning the rental property to offset the income from renting it. You will need to file a schedule E to report your rental activity on your personal tax return. As mentioned above, there are a lot of expenses that you can claim on the rental property. Two things to be careful of: If you have a duplex that you live in and rent the other part, be sure to keep good records of what items are personal and what are rental. For example if you pay the mortgage on and shared property you will need to split the mortgage between your personal deductions and your rental expenses.

    Secondly, be careful with what items are expenses and what are capital improvements. Technically anything that you do that is expected to last more than one year must be depreciated. So, for example, if you have a water heater fixed that is an expense, if you have it replaced, it is an asset and should be depreciated.



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    Re: Tax deductions from rental property

    define deductions. define from. define significant.

    doesn't matter. no.no.no.

    Quote Originally Posted by cycloneML View Post
    Are these significant?


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    Re: Tax deductions from rental property

    Quote Originally Posted by fccy View Post
    Are they significant? Yes.

    You need to define "rental property" first. I rent out half my house. I get tax deductions for what I spend on the rental half, and at least partial deductions for shared areas (i.e., lawn care). The good part of this is that since it is also my primary residence, I do not have to show a profit every so often, I can take a loss every year. If the rental property is not your primary residence, then you are running a business, and need to show a profit something like 2 out of 7 years.
    Starting in 2012, you'll need to start issuing 1099's for significant (>$600 in a year) expenses that you claim for your rental property.


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    Re: Tax deductions from rental property

    Quote Originally Posted by TykeClone View Post
    Starting in 2012, you'll need to start issuing 1099's for significant (>$600 in a year) expenses that you claim for your rental property.
    And you will need to provide your tenant with a 1099 showing how much they have paid you.



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    Re: Tax deductions from rental property

    Quote Originally Posted by cytech View Post
    And you will need to provide your tenant with a 1099 showing how much they have paid you.
    I'm not sure about that - 1099's are typically issued by the payer and not the payee.


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    Re: Tax deductions from rental property

    Quote Originally Posted by cytech View Post
    And you will need to provide your tenant with a 1099 showing how much they have paid you.
    That doesn't make sense. 1099's are normally used to report sometype of income.


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    Re: Tax deductions from rental property

    This is why someone does my taxes (the cost of tax prep for the rental half of the duplex is a tax deduction).



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