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 96152

Tax Deductions for Landlords in Zip Code 96152


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 96152
Cassells Ronald J
36 5th St
Petaluma, CA 94952
(707) 762-9699
Attorneys, Family Law Attorneys, Divorce Assistance, Legal Service Plans
Zimmerman, Jeffrey Neil
10 Keller St
Petaluma, CA 94952
(707) 763-9525
Divorce Assistance, Attorneys, Family Law Attorneys, Divorce Attorneys
Amador Valley Insurance
5779 Treosti Pl
Valley Springs, CA 95252
(209) 772-8876
Insurance Attorneys
The Hill Law Firm
318 S State Hwy 173
Lake Arrowhead, CA 92352
(909) 337-8787
General Practice Attorneys, Attorneys, Legal Service Plans
Leoni, Charles J
1120 B St
Petaluma, CA 94952
(707) 762-8377
Attorneys, General Practice Attorneys
Kurtzhall Law Group
P.O. Box
Oceanside, CA 92052
(760) 859-7616
Bankruptcy Law Attorneys
T & L Communicators
10434 Flowerdale Ct
Sun Valley, CA 91352
(818) 767-7483
Paralegals
International Professional Services
11101 Sherman Way # 4
Sun Valley, CA 91352
(818) 764-7286
Immigration Law Attorneys, Immigration & Naturalization Consultants, Attorneys
Spidall Law
12523 Limonite Ave #440-258
Jurupa Valley, CA 91752
(909) 208-7164
Bankruptcy Law Attorneys,  Criminal Law Attorneys,  Family Law Attorneys,  Landlord & Tenant Attorne
MVP Record Retrieval
PO Box 5237
Modesto, CA 95352
(209) 342-6662
Attorneys, Copying & Duplicating Service, Medical Records Service, Attorneys Support & Service Burea
Tinney Joseph C
17 Keller St
Petaluma, CA 94952
(707) 762-6631
Attorneys, General Practice Attorneys
Stewart & Okula Law Offices
331 Emerald Dr
Lake Arrowhead, CA 92352
(909) 337-6483
General Practice Attorneys, Attorneys, Legal Service Plans
Oliker Robert P
17 Keller St
Petaluma, CA 94952
(707) 778-6313
General Practice Attorneys, Attorneys
Arbino Maggie Mft Mediator
47 6th St Ste 204
Petaluma, CA 94952
(707) 765-5595
Mediation Services, Attorneys, Legal Service Plans
Petaluma Family Law Center
36 5th St
Petaluma, CA 94952
(707) 769-5490
Family Law Attorneys, Attorneys, Paralegals
Thuesen Victor C
11 Western Ave
Petaluma, CA 94952
(707) 763-5030
General Practice Attorneys, Attorneys
Putnam Jay G
523 B St
Petaluma, CA 94952
(707) 778-5000
Attorneys, Labor & Employment Law Attorneys, Civil Litigation & Trial Law Attorneys, Discrimination
Daniel E Chavez
407 C St
Petaluma, CA 94952
(707) 775-4531
Immigration Law Attorneys,  Administrative & Governmental Law Attorneys,  Attorneys,  Immigration &
Ehmann Carl G
28200 Highway 189 # F240
Lake Arrowhead, CA 92352
(909) 336-4440
Attorneys, Wills, Trusts & Estate Planning Attorneys, Corporation & Partnership Law Attorneys, Busin
Legal Documents Preparation
23580 Alessandro Blvd # 10106
Moreno Valley, CA 92552
(951) 656-4228
Paralegals, Legal Document Assistance
Chris Elzi
17 Keller St
Petaluma, CA 94952
(707) 762-3914
Attorneys, Legal Service Plans
Bechelli Joseph
15 Saint Andrews Rd Ste 4
Valley Springs, CA 95252
(209) 772-3681
Attorneys,  Real Estate Attorneys,  Family Law Attorneys,  Wills, Trusts & Estate Planning Attorney
Goetzinger Robert
124 Howard St
Petaluma, CA 94952
(707) 762-3568
Attorneys,  Mediation Services,  Divorce Assistance,  Legal Service Plans
Chavez-Ochoa Law Offices
4 Jean St
Valley Springs, CA 95252
(209) 772-3013
Attorneys,  General Practice Attorneys,  Legal Service Plans,  Criminal Law Attorneys,  Family Law A
12Law.com   |  NASHVILLE, TN USA   |  CONTACT US