So you have
rental property. Maybe it is a place at
the beach, or perhaps you are a landlord owning apartment buildings or
single-family homes. You collect rental
income for the properties, and probably spend more than you imagined for
upkeep, property management and advertising for renters. When tax time comes, if it doesn't seem
simple to determine what deductions the IRS allows, then this blog is right up
your alley, lane, road, etc.
The IRS advises that rental property owners may
deduct interest, taxes, casualty losses (a sudden event that destroys or
damages the property), maintenance, utilities that you pay, insurance on the
property and depreciation. If your
rental expenses exceed your rental income, then you may be entitled to take a
loss that offsets other taxable income, thus lowering tax liability.
If you rent
a dwelling that also doubles as your residence, then these deductions may be
more limited. Specifically, if you, the
owner, use the property for the greater of 14 days or 10% of the rental days,
then the dwelling is considered a personal dwelling, even if is a beach house
where you vacation and not your primary residence. Then you may be limited to deducting rental
expenses up to the amount of rental income and therefore you will not have a
loss that offsets other taxable income.
Now, here is
a good piece of news, if you rent your home for less than 15 days, you may be
able to exclude the rental income received as taxable. Of course, that also means that you may not
take expenses as a deduction, if the income is not taxable. For example, if the Olympics came to your
home town, you may work out a deal to go visit an out of town relative and sign
up for a company to rent your home for 14 days to those wanting a place to stay
while attending the event.
information regarding rental property, review Publication 527 at
Every effort has been taken to provide the
most accurate and honest analysis of the tax information provided in this blog.
Please use your discretion before making any decisions based on the information
provided. This blog is not intended to be a substitute for seeking professional
tax advice based on your individual needs.