can I claim rental loss income for taxes?

Question

Say that I turn my primary residence into a rental property and rent it for 1500 when my mortgage payment with taxes and insurance is really 2000.
can I claim that 500 monthly loss when I file taxes to IRS? If so how does that deduction work? Is it like any other deduction?

And lastly if I were to rent it for a gain hypothetically speaking, how does the gain get taxed? Like regular income? thank you.

Answer 1

any money you get is income, and taxable. if you live in a 2 family house only 50 percent of your expensives is a write off.33.33 percent for a three family

Answer 2

Yes the loss is a deduction, what the actually numbers are I don't know. And if you make money on the rental it is considered regular income. You may be better off talking with a CPA to get your states actual laws and regulations. I'm a landlord not a CPA and I just give all my receipts to the CPA and he gives me my final tax papers. Good Luck KG

Answer 3

No, you would be unable to declare an price for earnings you by no potential won. there's a distinction between by no potential receiving money (which would be taxable earnings in case you had won it) and dropping money you have already been taxed on. you could deduct criminal expenses of $60. once you get carry of the $a million,000, you rfile that as apartment earnings. look for professional guidance. those questions are remedial first-day tax compliance a hundred and one themes. there are a number of complicated themes in touch with apartment materials. The IRS has it set up so in case you do no longer understand what you're doing, they win, you lose.

Answer 4

Probably not. Rental income/loss is considered passive business, so losses can not offset ordinary income
read http://www.irs.gov/taxtopics/tc425.html
Profit will be treated like ordinary income.