This is topic Those with Rental properties please chime in in forum General Talk at Northern California Ford Owners .
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Posted by GOT 50 (Member # 1960) on
:
So I plan on buying a rental property out of state. I plan on speaking with a tax advisor soon but what some input from you guys that already have rental properties.
Am I better off claiming the house as my primary residence and not taking the depreciation deduction and not claiming the revenue from the rental fee?
?Do the numbers work out better listing it as a rental and going down the entire depreciation along with PM fees maintenance fees ect.
Thanks for any help.
Eric
Posted by GOT 50 (Member # 1960) on
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I think I have answered my own question. Seems way better of taking the 27.5 year depreciation along with all fees. Sounds like a sizable deduction!
Posted by NavidR (Member # 3164) on
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I have two rental properties, and I claim both as a rental property. People tend to scare you about the fees and taxes and its not bad at all. It is hard work owning a rental property, but it pays off. I'm hoping to pick up another house by end of this year.
If you want more detain, just PM me I'm not trying to put financial stuff on here.
The only thing that sucks with buying rental property is that you need more down payment, the interest is higher etc etc. I bought both rental properties as my resident, to save on the interest rate. I claimed my own home as a rental property and bought the new one!
Good luck
Posted by turbo50 (Member # 6700) on
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I have rental property and I 1099 it all I can tell you is to keep a landlord policy on it with your homeowners. Oh and never rent to family.
Posted by NavidR (Member # 3164) on
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I will call you tonight and we can talk!
Posted by NavidR (Member # 3164) on
:
quote:
Originally posted by turbo50:
I have rental property and I 1099 it all I can tell you is to keep a landlord policy on it with your homeowners. Oh and never rent to family.
Really??? I say only rent to families.... But regardless you never know what will happen, its hard work but IMO its worth it at the end
Posted by jmcclesk (Member # 1355) on
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I think he meant relatives
Posted by NEIGHT (Member # 8741) on
:
quote:
Originally posted by NavidR:
quote:
Originally posted by turbo50:
I have rental property and I 1099 it all I can tell you is to keep a landlord policy on it with your homeowners. Oh and never rent to family.
Really??? I say only rent to families.... But regardless you never know what will happen, its hard work but IMO its worth it at the end
I think he means your own family members. They end up fucking you one way or another because they think they don't need to pay you on-time or get a discount.
Posted by Beasty5.0 (Member # 2935) on
:
I would suggest you do not report a home as a personal residence when you have a property management company helping you manage the property. By federal law they are required to report any rental income that you received of $600 and up to you via form 1099 MISC. They are also required to send one to the IRS for the same amount, therefore, putting IRS on notice that you received this income.
As you may have already researched having a rental property allows you to deduct various expenses that you normally would not be allowed if it was classified as your personal residence. Depreciation is one of the bigger expenses that you are allowed. However, note that if you were to ever sell this property you will be required to recapture the depreciation, which means you will have to include the amount of depreciation that you took over several years as taxable income, unless of course you ended up doing a 1031 exchange. I won't go into detail, but just so you know a 1031 exchange is when you can exchange your rental property for another rental property and defer gains that you may have.
Anyways, like I always tell my family and friends, if you decide to do something that is not correct on your tax return just make sure that you understand the consequences (additional tax, penalties, interest) of filing incorrectly. Most tax preparers will not take responsibility for a position that you acknowledged and signed off on. Sure they will be glad to represent you if you get audited, more fees to bill, but you better believe their not going to cover the additional tax that you will owe if any adjustment is made on audit. Good luck bud.
Posted by 135.0 (Member # 4992) on
:
quote:
Originally posted by NEIGHT:
quote:
Originally posted by NavidR:
quote:
Originally posted by turbo50:
I have rental property and I 1099 it all I can tell you is to keep a landlord policy on it with your homeowners. Oh and never rent to family.
Really??? I say only rent to families.... But regardless you never know what will happen, its hard work but IMO its worth it at the end
I think he means your own family members. They end up fucking you one way or another because they think they don't need to pay you on-time or get a discount.
Fuck families, always rent to Mcdonalds job having kids that will do nothing but trash the house and stain the carpet. I never heard of reporting you rental property as your primary residence, that sounds like a great idea. LOL
Posted by turbo50 (Member # 6700) on
:
I meant family members not families.
I always err on the side of caution and 1099 it. There are loop holes and work around a from all aspects but like with anything rules are made to be broken and for that can come consequences. How or if you deal with them that's up to you.
Posted by NavidR (Member # 3164) on
:
quote:
Originally posted by 135.0:
quote:
Originally posted by NEIGHT:
quote:
Originally posted by NavidR:
quote:
Originally posted by turbo50:
I have rental property and I 1099 it all I can tell you is to keep a landlord policy on it with your homeowners. Oh and never rent to family.
Really??? I say only rent to families.... But regardless you never know what will happen, its hard work but IMO its worth it at the end
I think he means your own family members. They end up fucking you one way or another because they think they don't need to pay you on-time or get a discount.
Fuck families, always rent to Mcdonalds job having kids that will do nothing but trash the house and stain the carpet. I never heard of reporting you rental property as your primary residence, that sounds like a great idea. LOL
You only have to buy it as your primary residence, Than as long as you did a conventional loan, you can change your mind and rent it out. This helps in keeping the interest rates down, but only works if your buying a house in your area.
Posted by NavidR (Member # 3164) on
:
quote:
Originally posted by Beasty5.0:
I would suggest you do not report a home as a personal residence when you have a property management company helping you manage the property. By federal law they are required to report any rental income that you received of $600 and up to you via form 1099 MISC. They are also required to send one to the IRS for the same amount, therefore, putting IRS on notice that you received this income.
As you may have already researched having a rental property allows you to deduct various expenses that you normally would not be allowed if it was classified as your personal residence. Depreciation is one of the bigger expenses that you are allowed. However, note that if you were to ever sell this property you will be required to recapture the depreciation, which means you will have to include the amount of depreciation that you took over several years as taxable income, unless of course you ended up doing a 1031 exchange. I won't go into detail, but just so you know a 1031 exchange is when you can exchange your rental property for another rental property and defer gains that you may have.
Anyways, like I always tell my family and friends, if you decide to do something that is not correct on your tax return just make sure that you understand the consequences (additional tax, penalties, interest) of filing incorrectly. Most tax preparers will not take responsibility for a position that you acknowledged and signed off on. Sure they will be glad to represent you if you get audited, more fees to bill, but you better believe their not going to cover the additional tax that you will owe if any adjustment is made on audit. Good luck bud.
You have good point about filing taxes, with properties and all the deduction, the only way to do it right is to take it to a tax person and have them file for you. Its better to be safe than SORRY.....
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