What costs are tax deductible against a residentail rental property
a) major repairs?
b) minor repairs?
c) management fee - e.g., rental broker?
d) travel costs - e.g., air fare - to/from property?
e) depriciation?
f) Is there a sliding scale based on income level?
Thanks!
2006-12-09 18:52:14 · 5 answers · asked by Sanjay C 1 in Business & Finance ➔ Taxes ➔ United States
all repairs, depreciation, utilities paid by owner, upkeep such as lawn care and maintenance, insurance and property taxes.
You cannot claim the property at all for any of the above if the owner doesn't manage the property themselves. Travel costs are your problem. There is no such thing as a sliding scale. If you do not show a rental profit within 5 years, it's considered a hobby and no longer tax deductible for any reason.
2006-12-09 19:01:47 · answer #1 · answered by J Somethingorother 6 · 0⤊ 0⤋
I would strongly suggest that you consult with a local tax pro. I see several issues at work here that need professional intervention. Since this is an investment, your interest deduction is limited to your income and you have no income from it yet. The interest, as well as the travel costs, would be added to your basis, not deducted as itemized deductions or business expenses. Alternatively they could be treated as start-up costs and amortized over time once it starts generating income. Locate a CPA or EA who specializes in this type of investment.
2016-05-23 01:33:42 · answer #2 · answered by Clarissa 4 · 0⤊ 0⤋
Rental property is a business if you are actively involved. All legitimate costs of operating the business are deductible. (f): There is no sliding scale. (d): If the travel is for the purpose of managing the property, it can qualify subject to limitations. All the other items you list are deductible.
If you are not actively involved in managing the property, 'passive activity loss' rules apply. This does not limit the types of expenses that are deductible. They do limit deducting any net loss against other income.
2006-12-10 05:25:10 · answer #3 · answered by STEVEN F 7 · 0⤊ 0⤋
Major repairs (such as additions) should be capitalized and depreciated. The other costs look like legit expenses if they're associated with the property. Check with your accountant if you're not sure.
2006-12-10 01:58:31 · answer #4 · answered by crazydave 7 · 0⤊ 0⤋
all of the above are deductible expenses. in addition, you may deduct real estate taxes, interest, insurance, landscaping, maintenance, utilities, etc.
this is reported on Schedule E on your individual tax return.
no, there is no sliding scale based on income.
2006-12-09 20:52:42 · answer #5 · answered by tma 6 · 0⤊ 0⤋