This year, my family moved from Michigan to San Diego. We knew, when taking the new job, that we'd have a tough time selling the house. We'll we failed and in November, to avoid continuing to have to shell out all the mortgage and those heavy Michigan winter heating bills, we turned it into a rental. We still lose $300 per month but it's better than losing all the mortgage. So this year I will only post $2,365 loss mostly due to cost to get it in service, but this will likely be a loss of at least $4K until I can pay off the mortgage, or refinance. What should I do? I don't care about the loss due to my high salary in San Diego, but I don't want the loss + an audit. Should I take the loss, but not put it as a loss against my salary? I read a little about this 'passive loss rule', but I hardly understand all the consequences. I don't have any other passive income to write it off against? Should I start some other passive income to write off this loss against? Thoughts would be great.
2007-01-15 10:13:34 · 3 answers · asked by Ryan W 2 in Business & Finance ➔ Renting & Real Estate
A $4000 loss is minor. You can take upto a $25,000 loss without being a real estate professional. I highly doubt it would trip in audit.
2007-01-15 10:35:26 · answer #1 · answered by RN 2 · 0⤊ 0⤋
Get thee to a tax professional. This is complicated stuff. Not only will you have peace of mind, but s/he will probably pay for themselves in tax savings.
2007-01-15 11:27:09 · answer #2 · answered by Mary 3 · 0⤊ 0⤋
I think if you put this under the "taxes" or "finances" section, you might get the attention of people who would know how to answer this.
2007-01-15 10:21:28 · answer #3 · answered by Anonymous · 0⤊ 0⤋