Q. Curious if anyone around here knows anything about tax deductions with rental properties. I am looking at a cost of about $4,000 for emergency plumbing repairs and wondering how much of that I can expect to get back at the end of the year in my tax return?
A. A "repair" of that amount is probably going to be classified as a capital improvement subject to depreciation. If so, the tax benefit will be spread over 27.5 years so you'll see very little of it on your 2010 return.
If you can make a case for expensing the entire amount (and that is VERY DOUBTFUL), multiply the cost by your tax rate. This may be 15%, 25% or more.
If you can make a case for expensing the entire amount (and that is VERY DOUBTFUL), multiply the cost by your tax rate. This may be 15%, 25% or more.
Can we get tax deduction on second house?
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
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