rental homes tax deductions


D

dyu9999

I would appreciate any clarifications.

I bought 2 homes in a different state, planning to rent for
a profit, I also hired the agent to manage and put them out
for rent for months but could not rent, so I sold them
before the year end. My questions:

1) Should I treat them as vacation home or rental home (
even though I did not rent for a day )? The homes are empty
all the time.

2) What are the major differences between vacation/rental
homes in terms of tax deductions ?

3) Can I deduct property tax, mortage, purchasing/selling
fees, insurance premium, fix-ups, utilities ? Is there a
limit on the deductions ?

4) Which Schedule/Forms should I use ?

5) Do I claims each house separately or can combine the
numbers together ?

Thanks much!
 
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M

mytax

You should engage a local tax preparer to do it for you this
year. You have too many different things for a novice to
handle.

Missy Doyle
 
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A

Arthur L. Rubin

I would appreciate any clarifications.

I bought 2 homes in a different state, planning to rent for
a profit, I also hired the agent to manage and put them out
for rent for months but could not rent, so I sold them
before the year end. My questions:

1) Should I treat them as vacation home or rental home (
even though I did not rent for a day )? The homes are empty
all the time.
They're rental properties from the time they are put up and
available for rent.
2) What are the major differences between vacation/rental
homes in terms of tax deductions ?
Vacation homes: Property taxes are deductible. Interest
using your main home and one other home as collateral are
deductible. Repairs have no tax consequences.
Improvements are capitalized.

Rental property: All taxes are deductible. Interest USED
on the prpoerty is deductible. Repairs are deductible.
Improvements (and the value of the home) are depreciated.
3) Can I deduct property tax, mortage, purchasing/selling
fees, insurance premium, fix-ups, utilities ? Is there a
limit on the deductions ?
Purchase/sale fees are adjustments to basis or the selling
price, in either case. For rental property, deductions in
excess of income may be suspended. For a vacation home with
incidental rental, deductions in excess of income are lost.
4) Which Schedule/Forms should I use ?
Schedule E.
5) Do I claims each house separately or can combine the
numbers together ?
Separate columns on Schedule E. They get combined, later.

You probably do need a professional this year. However,
I'm almost certain the properties are rental properties.
 

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