Hi All,
New member and just joined. What a great forum. Historically I've always prepared my own taxes but my situation has changed substantially in 2018 so I will likely hire a competent local CPA that I know from doing some work for. Anyway, wanted to run a few items past you all to be sure I have at least a general understanding of how my deductions will work.
I own 3 homes and several vacant rural lots. One home is my family's primary residence. Another a family member lives in rent-free. The third is an occupied, income-generating rental home. What are my limitations in deducting these real estate taxes that I pay (in total approx $18,000)? RE taxes for primary can be deducted from personal income. Income-generating RE taxes go against the income from rent? Freeloading family member RE taxes nothing. Assume the RE taxes for the rural lots can also not be deducted?
As for the income-generating rental property, I paid approx. $6,000 for "repairs", or at least what I consider a repair. What is allowed to be deducted from the income? Upgrades increase value, repairs maintain value, correct? So replacing rotted drywall with new drywall (and labor) is a repair. Replacing vent collars on the roof and replacing a sink that broke are repairs. What about replacing vinyl flooring with new (contractor grade) vinyl flooring? The old flooring was trashed - needed replacing. What about installing a new $500 gas range? The old one was 25 yrs old and broke. Are these improvements or repairs? Municipal licensing fee to rent is deductible as well, correct?
Finally, I have a separate consulting business unrelated to the rental income. Both of those incomes are looked at together (and expenses together), or are consulting expenses taken from consulting income and rental repairs from rental income, and then combined? Make sense?
Thank you all!
New member and just joined. What a great forum. Historically I've always prepared my own taxes but my situation has changed substantially in 2018 so I will likely hire a competent local CPA that I know from doing some work for. Anyway, wanted to run a few items past you all to be sure I have at least a general understanding of how my deductions will work.
I own 3 homes and several vacant rural lots. One home is my family's primary residence. Another a family member lives in rent-free. The third is an occupied, income-generating rental home. What are my limitations in deducting these real estate taxes that I pay (in total approx $18,000)? RE taxes for primary can be deducted from personal income. Income-generating RE taxes go against the income from rent? Freeloading family member RE taxes nothing. Assume the RE taxes for the rural lots can also not be deducted?
As for the income-generating rental property, I paid approx. $6,000 for "repairs", or at least what I consider a repair. What is allowed to be deducted from the income? Upgrades increase value, repairs maintain value, correct? So replacing rotted drywall with new drywall (and labor) is a repair. Replacing vent collars on the roof and replacing a sink that broke are repairs. What about replacing vinyl flooring with new (contractor grade) vinyl flooring? The old flooring was trashed - needed replacing. What about installing a new $500 gas range? The old one was 25 yrs old and broke. Are these improvements or repairs? Municipal licensing fee to rent is deductible as well, correct?
Finally, I have a separate consulting business unrelated to the rental income. Both of those incomes are looked at together (and expenses together), or are consulting expenses taken from consulting income and rental repairs from rental income, and then combined? Make sense?
Thank you all!
Federal Taxes: Rental Property Taxes and Expenses
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