Thank you for explaining everything in detail. One question, if you spend say $50K in renovations to a rental property and claim the $50k in depreciation, will the property taxes go up on the rental property because you added $50K to the rental property depreciation section?
It's up to the county assessor to determine the property tax amount. Unless you added a story or multiple rooms then not likely to go up from the rehab
if you charge under market rent to family member the IRS could come back and increase your theoretical rental income on your taxes. So if you charge $1500 but going rate was $3K then even though you did not get the $3K from your family member IRS could tax you as if you did. Check with accountant to be sure
We are renovating and making repairs to a home we purchased to be a rental property. I was told I cannot deduct repairs or depreciate renovations if the property is not actively being rented out. Is the accurate to your knowledge? Thanks
Is there an income limit for claiming depreciation? I have a 9-to-5 job that earns me 170k a year. I recently purchased a rental house. Can I claim depreciation on it? Or does my 170k a year income prevents it? I googled it. And in almost all articles about depreciation says “if your income is 150k or above, you cannot claim rental loss”. This confused me. Articles are about depreciation. But when I read the part I am interested in, they switch the language to “rental loss”. Unless depreciation is considered part of rental loss, I don’t see why everyone would put that in an article about depreciation.
You need to depreciate the property no matter what. Now if the depreciation and other expenses like mortgage interest are larger than your rental income and you generate a loss, you wont be able to use that loss against your total income that year BUT you can carry losses forward. So say the next year you make less or have another source of passive income you can apply up to 25000 of those carryover losses. Either way you need to keep track of depreciation in case you sell.
i just bout a new home and im renting my old property out, turbo tax iis asking if i want to use tax court method or iris method, which is better? i lived in my old property im now renting for 167 days, rented it for the remaining 181 days or so. which should i select? turbotax is no help
Sorry I wish I could help but I'm not an accountant and wouldn't really know how to advise you best. If you can get a recommendation to a local accountant, they can be your best source to advise.
