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*****Do You REALLY Want To Start A Business.?*****
The ideal of being your own boss is very attractive and casually asked most people would say, "yes to be my own boss would be great." However, it needs to go farther than being the ideal. Having your own business is super. But what is it that you...
Don't Let Them Take Your Money and Run!
The Internet is full of scams and fraud. Many are in the form of "income opportunities" and "investment programs." Sometimes it's hard to tell if a company is legitimate or not. Unfortunately, many of them aren't and people get scammed into...
Internet Business Startup Guide
The text below is the introduction section to our 20 page FREE Guide to starting up your own internet business.
To download the full guide please go to http://www.sanechoice.net/reportsignup.html
Your idea is just the seed for your new...
Is Your Web Site Ready For Its Visitors?
There’s a great interest among the Internet entrepreneurs about how to promote their business on the Web. There’s always a quest for new and innovative ways of promotion that promise greater results at lower cost and in shorter time. Yet with...
What Size Body Section Ranks Highest?
This is another one of the controversial questions in many of the SEO (Search Engine Optimization) forums, yet it is very easy to answer for any particular search engine. While popular belief seems to be that pages should be very short (less than...
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Rental Property Tax Deductions
Own residential rental properties? This article discusses how income from those properties impacts your taxes.
What Constitutes Revenue?
Generally, rental income is defined as any revenue you receive from the occupancy or use of residential property. Rent, obviously, is included in that revenue. Many owners are surprised to learn revenue also includes rent advancements, expenses paid by a tenant and any security deposits not returned to the tenant. In fact, revenue can also include amounts paid to cancel a lease, even if you had to sue the defendant to get it.
Yeah, Yeah, But What Can I Deduct?
Tax deductions associated with rental properties are strikingly similar to those found in any business. Technically, you can deduct any expense reasonably necessary to “manage, conserve or maintain” the property. Obvious deductions include mortgage payments, cleaning expenses, insurance premiums, service payments such as landscape maintenance, repairs, maintenance, etc. Overlooked rental property deductions include:
1. Expenses incurred in finding tenants,
2. Commissions paid to third parties that arrange for tenants,
3. Paying your accountant and/or lawyer,
4. Mileage for driving to and from the property [I
said, “No more parties!”]
5. Depreciation of the property,
6. Depreciation of items in the property such as washing machines, furniture, etc.
Imaginary Rent Deduction
A few creative property owners have suggested that they should be able to deduct their customary and standard monthly rent if the property is empty. The argument goes, “If the property is empty, I am not making revenue and should be able to deduct the $1,500 that I am missing out on.” At first glance, this almost makes sense. Sadly, it doesn’t fly from the perspective of the IRS. Since you are not receiving revenues, your total revenues for the year will be reduced by the loss rent. You can’t double dip by deducting the $1,500 from the already reduced yearly revenues. The only things you can deduct are the expenses you incur during this period, and only for so long as you are actively trying to rent the place.
Rental properties are a great investment. Even more so if you stay on top of your taxes.
About the Author
Richard Chapo is CEO of Business Tax Recovery - Obtaining tax refunds for small businesses by finding overlooked tax deductions and credits through a free tax return review.
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Finance - Leases-Leasing Ezine Articles |
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