12Law Arrow 12Law Arrow  Easy Questions  
12Law Arrow 12Law Arrow Instant Legal Documents
 
 
FINANCIAL & MARITAL

Cohabitation Agreement coming soon!
Separation Agreement coming soon!
No-Fault Divorce coming soon!
Bankruptcy coming soon!
 
 

Tax Deductions for Landlords in Zip Code 92267

Tax Deductions for Landlords in Zip Code 92267


I would uphold the law if for no other reason but to protect myself.
 
- Thomas More


Owning a rental property can be a rewarding venture because of its many tax deduction features. The US government lets land owners and landlords deduct certain expenses on their taxes that can offset their assessable income.

Landlords are likely to have tax due to depreciation, which is a non-cash expense. Residential buildings are depreciated over 27.5 years and commercial buildings over 39 years. However, your ability to actually deduct rental tax losses may or may not be postponed by the passive activity loss (PAL) rules.

The default treatment of tax losses from owning rental real estate is to consider them passive activity losses (PALs). That's unfavorable because you can only deduct PALs to the extent you have passive income from other sources (such as income from other rental properties or gains from selling rental properties). Excess PALs are suspended until you have enough passive income to deduct them. You can also deduct suspended PALs when you sell the properties that generated the PALs.

There are two taxpayer-friendly exceptions to the PAL rules: 1) for active investors - owning a 10% or greater stake and at least making management decisions like approving tenants, signing leases, authorizing repairs, and so forth; or 2) for real estate professionals - spending over 750 hours during the year in real estate activities including non-rental activities such as acting as a realtor or real estate broker) in which you materially participate. In addition, the hours you spend on real estate activities must exceed 50% of all the time you spend working on personal service activities.


Common tax Deductions for Landlords

Expenses can be deducted if they belong to ordinary and necessary in the line of business:

• Ordinary Expenses. This refers to "common and accepted" within the industry.

• Necessary Expenses. This refers to "helpful and appropriate" expenses for the business.

Points of Caution

• If you want to claim any deductions to your taxes, you must keep a detail and accurate records of the expenses.

• Even if this is common tax deductions, this is not applicable to all landlords, rental property owner or property investor.

Common Tax Deductions

• Depreciation. These expenses refer to the things purchased for the business which is still useful beyond the current tax year. It has to meet three rules :

o It should last more than a year

o It should be of value to the business

o Wear out or lose its value over time

Examples of depreciated assets:

o Purchase price of the property

o Improvements done in the property

o Added fences or shrubbery

o Appliances or furniture

o Car for business use


• Passive Activity Losses. This limits your ability to claim losses that have incurred in passive activity from other types of income. Having a rental property can be considered as a passive activity, unless you are an active investor or a real estate professional, as described above.

• Repairs. These are work necessary to keep your property in good working condition. Painting can be part of the repair. These upgrades do not add value to the property. Not all maintenance done in the property is considered repairs. Be aware that IRS makes distinction between improvement and repair. Improvements can add value to the property and cannot be deducted in full in the year they incurred. Improvements in property will be capitalized and depreciated over their useful life.

• Travel Expenses. This refers to long distance and certain local travel expenses as long as they are business related. It does not include the daily traveling from your home to your place of business.You can take deduction when you have a car using standard mileage rate or using the actual expenses incurred such as depreciation on the vehicle, gasoline and vehicle maintenance and other vehicle related expenses. Public transportation expenses use when conducting business can also be deducted when you do not have a car.


• Interest. You can deduct the interest on paid business related expenses.

• Home Office. If you use part of your home as an office you can deduct it as part of a home office deduction. The amount depends upon the percentage of the home office takes up from your home.

• Entertainment Costs. These are cost incurred during business dealings.

• Legal and Professional Fees. Hiring a professional to do work for the business allows you to deduct the fees paid them.

• Employee Compensation.You can deduct the wages to pay employees involved in running the business as business expenses.

• Taxes.Property tax, real estate taxes and sales taxes on business related items that are not depreciable for the year can be deducted. You can also deduct fees for tax advice and the preparation of tax forms related to the real estate property.

• Insurance. Premiums paid for commercial insurance, liability coverage, health insurance for employees, etc. can all be deducted.

• Casualty Losses. Damage to property that happen during a catastrophic event like fire can be part of the deduction.

Other Common Tax Deductions Include:

• Advertising costs

• Rent paid to others

• Telephone calls related to your rental property activities

• You can credit or deduct expenses paid to make your property accessible to individuals with disabilities or the elderly

 
Personalize & Print a Free CA Last Will Create This Document
Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Page 9
Page 10
 
Personalize & Print a Free CA Living Will Create This Document
Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Related Legal Services near Zip Code 92267
Ryan, Blake & Associates
1901 Avenue of the Stars 2nd Floor
Century City, CA 90067
(877) 927-9990
Legal Service Plans, Business Litigation Attorneys, Real Estate Attorneys, Loans
Walton Lorrie A
1740 W Katella Ave
Orange, CA 92867
(714) 978-9988
Attorneys
Gillam Law Firm P C
1801 Century Park E # 1560
Los Angeles, CA 90067
(310) 203-9977
Attorneys, General Practice Attorneys, Discrimination & Civil Rights Law Attorneys, Legal Service Pl
Gibson Michelle Law Offices
21860 Burbank Blvd Ste 360
Woodland Hills, CA 91367
(818) 999-9957
General Practice Attorneys, Attorneys, Legal Service Plans
Jubin J. Sharifi, APLC
1875 Century Park E
Los Angeles, CA 90067
(323) 848-9904
Attorneys,  Accident & Property Damage Attorneys,  Personal Injury Law Attorneys,  Wrongful Death At
Goldberg Barry P
21650 Oxnard St # 1960
Woodland Hills, CA 91367
(818) 226-9840
Attorneys
Brad Kuenning Law Ofc
1875 Century Park E
Los Angeles, CA 90067
(626) 564-9792
Labor & Employment Law Attorneys, Attorneys, General Practice Attorneys, Legal Service Plans
Weidmann Mark
1880 Century Park E Suite 817
Los Angeles, CA 90067
(310) 201-9699
Attorneys, General Practice Attorneys, Legal Service Plans
Nehoray Legal Group
21900 Burbank Blvd Fl 3rd
Woodland Hills, CA 91367
(818) 571-9696
Bankruptcy Law Attorneys, Legal Service Plans, Attorneys
Eddy William
PO Box 70067
San Diego, CA 92167
(619) 232-9688
Mediation Services,  Attorneys,  Arbitration Services,  Legal Service Plans
Rosenberg Gary A
6400 Canoga Ave # 205
Woodland Hills, CA 91367
(818) 883-9545
General Practice Attorneys, Attorneys, Legal Service Plans
Kemp Maurice
19851 Hartmann Rd Ste A
Hidden Valley Lake, CA 95467
(707) 987-9523
Attorneys, Legal Service Plans
Kemp Maurice
18448 Kentwood Pl
Hidden Valley Lake, CA 95467
(707) 987-9523
Attorneys, Legal Service Plans
Silver & Freedman Attorneys
2029 Century Park E # 1900
Los Angeles, CA 90067
(310) 282-9400
Attorneys, General Practice Attorneys, Legal Service Plans, Labor & Employment Law Attorneys, Busine
Dana's Secretarial Services
P.O. Box 2897
Paradise, CA 95967
(530) 228-9341
Paralegals
Linder Mark J
1900 Avenue Of The Stars #1800
Los Angeles, CA 90067
(310) 556-9280
General Practice Attorneys, Attorneys
Goldberg & Gage
23002 Victory Blvd
Woodland Hills, CA 91367
(818) 340-9252
Personal Injury Law Attorneys, Attorneys, General Practice Attorneys
The Nourmand Law Firm, APC
1801 Century Park East suite 2600
Los Angeles, CA 90067
(800) 700-9243
Corporation & Partnership Law Attorneys,  Attorneys,  Accident & Property Damage Attorneys,  Real Es
US Legal Support
20970 Warner Center Ln # C
Woodland Hills, CA 91367
(818) 878-9227
Attorneys Referral & Information Service
Seifert Norbert M
1801 Avenue Of The Stars # 920
Los Angeles, CA 90067
(310) 277-9150
General Practice Attorneys, Attorneys
Kane Paula
1900 Avenue Of The Stars # 2000
Los Angeles, CA 90067
(310) 550-9123
General Practice Attorneys, Attorneys
US Visa Assoc INC
21550 Oxnard St # 695
Woodland Hills, CA 91367
(818) 999-9088
Immigration Law Attorneys, Attorneys
Pocrass Law Corporation
1875 Century Park E
Los Angeles, CA 90067
(310) 550-9050
General Practice Attorneys, Attorneys, Legal Service Plans
Betsy H. Alberts
309 Placerville Dr
Placerville, CA 95667
(530) 622-9010
Attorneys, Social Security & Disability Law Attorneys
12Law.com   |  NASHVILLE, TN USA   |  CONTACT US