|
|
|
|
Junior Member
|
|
Jan 27, 2009, 10:34 AM
|
|
What can I claim on rental property
My wife and I just recently purchased a house that we some day plan to rent out. The house needs some fixing up and CLEANING up from the previous owners. The yard and house both was full of junk. Can I claim my and my wife's time for clean up efforts on my taxes? What all else can I claim when it comes time to start remodeling and later renting it out?
|
|
|
Uber Member
|
|
Jan 27, 2009, 10:56 AM
|
|
No, you cannot claim your time. Only actual expenses, which includes any materials and the mileage.
As for what else you can claim, in short: any and all expenses that were incurred that are directly related to the property:
Utilities, materials, contract labor, mileage, phone use, etc.
Check out IRS Schedule E for a list of stuff and how they categorize it.
|
|
|
Senior Tax Expert
|
|
Jan 28, 2009, 12:31 PM
|
|
Actually, the expenses and rental income are reported on Schedule E, NOT C.
|
|
|
Uber Member
|
|
Jan 29, 2009, 05:12 AM
|
|
Wooooops, of course! My fingers were working overtime.
Indeed, it's the Schedule E, not C. I corrected my post above.
See attached below.
|
|
|
Tax Expert
|
|
Jan 29, 2009, 06:23 AM
|
|
You can not claim any expenses including remodeling expenses till the house is ready for renting. The are all capital expenses; they will increase your cost basis.
|
|
|
Uber Member
|
|
Jan 29, 2009, 07:35 AM
|
|
"ready for renting" in my experience, is a debatable topic.
I can consider an apartment ready for renting even if it needs a lot of work...
Nothing is an exact science on this issue...
As far as I'm concerned and I've been advised locally (and I will welcome and encourage comments or disagreement from our Tax Experts); if I own it and there's a roof and there is running water and heat, then it's "rentable".
|
|
|
Computer Expert and Renaissance Man
|
|
Jan 29, 2009, 07:58 AM
|
|
I expect our tax experts will correct me if I'm wrong here, but what you should do is setup a company (Inc or LLC) to purchase the house. You can then bill the corporation for any expenses (including your time) in repairing or maintaining the property.
|
|
|
Senior Tax Expert
|
|
Jan 29, 2009, 02:32 PM
|
|
Billing a closely-held corporation or LLC for your time if YOU are the owner is related-party activity will draw the attention of the IRS.
Such related-party transactions draw such IRS attention because they are subject to massive abuse by the owners.
|
|
|
Computer Expert and Renaissance Man
|
|
Jan 29, 2009, 03:48 PM
|
|
Ooopps
|
|
Question Tools |
Search this Question |
|
|
Add your answer here.
Check out some similar questions!
Loss of rent can you claim it as an expense of the rental
[ 2 Answers ]
If you own two homes One is your primary the other you rented.
07 was the first year as a rental While trying to find a rentor the house was empty for some time and it has taken 5 months to rent can you claim loss of rent as a cost for those five months?
Property rental
[ 1 Answers ]
I am considering renting some space in my building to a hairdresser. She has her own equipment. My question is this, who is suppose to pay to the installation of her equipment and making the space 'beauty shop friendly'? We have worked out an amount for monthly rent.
Also is there a simple...
Rental Property
[ 1 Answers ]
I live in California. I rented a home to a tenant, with a one year lease. Now, I don't think I'll be able to continue to pay the mortgage, even with the rental income. What happens if I'm unable to pay the mortgage and the house goes into foreclosure? Specifically, what happens to the tenant? ...
View more questions
Search
|