Building rental property.


L

ladue21

I am halfway thru building a rental property in ohio. I
understand that most of my expenses add to my basis in the
property but what can I write off? Interest paid on the
loan, costs associated with finding the property, real
estate fees? I own other properties and this is my first
time building one.

Thanks for your help.
 
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T

Thomas Healy

ladue21 said:
I am halfway thru building a rental property in ohio. I
understand that most of my expenses add to my basis in the
property but what can I write off? Interest paid on the
loan, costs associated with finding the property, real
estate fees? I own other properties and this is my first
time building one.
Pretty much nothing. It's all capital expenditures.
 
A

Allan Martin

ladue21 said:
I am halfway thru building a rental property in ohio. I
understand that most of my expenses add to my basis in the
property but what can I write off? Interest paid on the
loan, costs associated with finding the property, real
estate fees? I own other properties and this is my first
time building one.
Construction period interest and real estate taxes get added
to the basis. You can't expense them.
 
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H

Harlan Lunsford

ladue21 said:
I am halfway thru building a rental property in ohio. I
understand that most of my expenses add to my basis in the
property but what can I write off? Interest paid on the
loan, costs associated with finding the property, real
estate fees? I own other properties and this is my first
time building one.
ALL cost preparatory to your first rental are capitalized,
and therefore add to the basis of the building. Be careful
however and allocate costs to building and land. For
instance, closing costs on a loan for a client pertain to
both land and the building, so a certain percentage (15% in
this case) were added to value of land, which is not
depreciable.

ChEAr$,
Harlan Lunsford, EA n LA
Sun 20 Mar 2005
 

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