Q. I have two houses. The second house is the rental property which i bought last year. Can I get tax deduction on that or not.
A. Rental property expenses aren't itemized deductions, but are shown as expenses on schedule E.
Can I take a deduction on my Arizona Rental Property if I live in California?
Q. I have a rental property in Arizona but live and work in California. I rent a SFR to another family. The person who does my taxes has made deductions/losses for my rental property in Arizona on my California income tax returns. Is s/he correct? Or should those be on a Arizona income tax return? Another person recommended that I file an Arizona income tax even if I dont make money on the
rental property. IS s/he correct? Help!
rental property. IS s/he correct? Help!
A. You are a resident of CA so all your income belongs there. If you have enough net profit on the AZ house to require you to file for that state, you'll need to do so but I doubt that is the case.
Sounds like your preparer knows what he/she is doing and the other person does not.
Sounds like your preparer knows what he/she is doing and the other person does not.
Can owning 1 or 2 rental property qualify you as a real estate professional.?
Q. I am planning to buy 2 rental properties, approximately $250,000 total. My wife and I both work full-time. Does owning 2 rental properties qualify either one of us as a real estate professional so that we could get losses on these properties as tax deductions against our personal income.? If not, what can we do about these rental losses (mainly due to depreciation on the property). Thanks in advance.
A. You report your rental income and your rental expenses (interest, taxes, repairs, utilities, depreciated property & improvements).
If your expenses are more than your income, you have a loss and it is deducted from your taxable income.
You do not have to be a real estate professional to do this, just own the properties.
http://www.irs.gov/taxtopics/tc414.html
http://www.irs.gov/businesses/small/industries/article/0,,id=98895,00.html
http://taxes.about.com/od/taxhelp/a/Schedule_E.htm
http://taxes.about.com/od/income/qt/Schedule_E.htm
If your expenses are more than your income, you have a loss and it is deducted from your taxable income.
You do not have to be a real estate professional to do this, just own the properties.
http://www.irs.gov/taxtopics/tc414.html
http://www.irs.gov/businesses/small/industries/article/0,,id=98895,00.html
http://taxes.about.com/od/taxhelp/a/Schedule_E.htm
http://taxes.about.com/od/income/qt/Schedule_E.htm
No rental income this year, will I still be able to claim repair cost for tax deduction?
Q. I bought a rental condo (foreclosed property) in October, 2009 and will spend November and December to fix it up, so basically I don't have any rental income this year. I wonder if I am able to claim the repair cost (~$5,000) for tax deduction.
A. I agree somewhat with CPA Guy, but to me, your repairs seem to be part of an improvement process. By that, I mean that everything taken as a whole is a capital improvement even if some of the parts are usually considered repairs. For example, painting a wall is usually a repair, but when you paint a wall after moving it, then the painting is considered as part of a capital improvement project. Without knowing the price, condition, and what work you are doing, I'm guessing, but to me $5,000 sounds like capital improvements.
Depreciation on the condo doesn't start until it is available for renting. That means the day somebody could move into it.
A place to start for you to understand the tax implications is IRS Publication 527, available on the IRS web site at http://www.irs.gov/pub/irs-pdf/p527.pdf
If you are still confused, you should consider seeing a local tax professional before the end of this year. Take a copy of your 2008 tax return with you.
I hope this helps.
Gary
Addendum:
If the work you are doing is to make the home usable as a rental property, then not only should you capitalize those expenditures but also any interest paid on a loan until the home is ready for occupancy.
Depreciation on the condo doesn't start until it is available for renting. That means the day somebody could move into it.
A place to start for you to understand the tax implications is IRS Publication 527, available on the IRS web site at http://www.irs.gov/pub/irs-pdf/p527.pdf
If you are still confused, you should consider seeing a local tax professional before the end of this year. Take a copy of your 2008 tax return with you.
I hope this helps.
Gary
Addendum:
If the work you are doing is to make the home usable as a rental property, then not only should you capitalize those expenditures but also any interest paid on a loan until the home is ready for occupancy.
Powered by Yahoo! Answers
No comments:
Post a Comment