Rental deduction


P

pallav

I have a home in PA that was my primary home until July 2010. I moved
to CA and now live in an apartment. For 2011, my home in PA was rented
for 6 months. Then it was vacant for 5 months at which point in time I
listed it for sale. It didn't sell. In mid Dec 2011, I found a tenant
and rented it out for 12 months.

Since the original tenants trashed the place, I spent a lot of money
doing repair work on the house. Consequently, I had a net income loss
of -28K (including 8K for depreciation). However, given that it was
rented for only 6.5 months, I can only deduct about 18K of the
expenses this year and carry the 10K for next year. Is it possible to
deduct the mortgage interest + property taxes + mortgage insurance
premium only for the 5.5 months it was vacant and listed for sale in
Schedule A? Say this amount is 5K. I deduct 5K in Schedule A and only
carry over 5K (instead of 10K) into next year?

Or can I just treat this as my "main" home and just deduct all the
mortgage interest + property taxes + mortgage insurance premium in
Schedule A and not consider these as business expenses in Schedule E?
In Schedule E, I just report total rent + repair work / damage
expenses arising just from the rental portion? If so, then I shouldn't
be depreciating the property right?

Thank you for any help.
 
Ad

Advertisements

J

JoeTaxpayer

I have a home in PA that was my primary home until July 2010. I moved
to CA and now live in an apartment. For 2011, my home in PA was rented
for 6 months. Then it was vacant for 5 months at which point in time I
listed it for sale. It didn't sell. In mid Dec 2011, I found a tenant
and rented it out for 12 months.

Since the original tenants trashed the place, I spent a lot of money
doing repair work on the house. Consequently, I had a net income loss
of -28K (including 8K for depreciation). However, given that it was
rented for only 6.5 months, I can only deduct about 18K of the
expenses this year and carry the 10K for next year. Is it possible to
deduct the mortgage interest + property taxes + mortgage insurance
premium only for the 5.5 months it was vacant and listed for sale in
Schedule A? Say this amount is 5K. I deduct 5K in Schedule A and only
carry over 5K (instead of 10K) into next year?

Or can I just treat this as my "main" home and just deduct all the
mortgage interest + property taxes + mortgage insurance premium in
Schedule A and not consider these as business expenses in Schedule E?
In Schedule E, I just report total rent + repair work / damage
expenses arising just from the rental portion? If so, then I shouldn't
be depreciating the property right?
If, during that 5 months, it was being repaired, I might make a case for
it still being considered rental property.
When I moved out and listed the place for rent, that listing was the
date I used when deciding when it became a rental. During periods
between tenants, it's still a rental.
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top