RENTAL PROPERTY


V

Vinman

Someone Please help until I can find a local accountant:

Here are the facts:

I will be buting a house in Florida with my brother, we will be equal owners. The house was built in 2000, is completely furnished, and the price we will pay will be 277500. It will be used only as a rental property. Please explain in laymens terms as the information in the tax code is vague and confusing to me.

Here are my questions:

1
Will I have to file a state form for Florida?

2
What closing costs will be deductible, we both already own a primary house? Will the Mortgage tax due at the closing be deductible?

3
Do I need to itemize the furnishings for depreciation? Should I depreciate the house and the furnishings? And please explain depreciation as it applies to the house and the furnishings.
To me this is a very confusing issue, as the building is valued at at 255000 and the various furnishings at about 35000 to 40000.

4
Any other help or resources on things I might be missing would be greatly appreciated.
Thanks to all..........
 
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P

Paul A. Thomas

Vinman said:
Someone Please help until I can find a local accountant:

Here are the facts:

I will be buting a house in Florida with my brother, we will be equal
owners. The house was built in 2000, is completely furnished, and the price
we will pay will be 277500. It will be used only as a rental property.
Please explain in laymens terms as the information in the tax code is vague
and confusing to me.
Here are my questions:

1
Will I have to file a state form for Florida?
Probably not, as Florida doesn't have an individual income tax.
But......there may be some state or local taxes or fees that would be due on
property rentals.


2
What closing costs will be deductible, we both already own a primary
house? Will the Mortgage tax due at the closing be deductible?

Your closing costs are part of your cost basis in the property, and as such
ar capitalized and depreciated over 28 years.


3
Do I need to itemize the furnishings for depreciation?
Yes, it's helpful, as when the time comes to replace one piece of furnishing
or appliance, you can remove that amount from your books and add the new
item.

Should I depreciate the house and the furnishings?
You have to......or at least claim that you did when you sell the property.
so it benefits you to claim now what you'll have to in the end.

And please explain depreciation as it applies to the house and the
furnishings.

Depreciation is the method of spreading the expense over a number of years.
Residential rental property is generally depreciated over 27.5 years (or
about 28 tax returns). This would include the building (but not the land)
and any piece of furniture or appliance that is atached to the building
(like a central heating/air unit). Most of the other furnishings are
depreciated over 7 years.

To me this is a very confusing issue, as the building is valued at at
255000 and the various furnishings at about 35000 to 40000.

And there is the land.

4
Any other help or resources on things I might be missing would be greatly
appreciated.


Is this a short-term rental property (like a vacation condo?) where the
average renter would be there for a short time?
 
K

Kathy Giaccio

Paul A. Thomas said:
owners. The house was built in 2000, is completely furnished, and the price
we will pay will be 277500. It will be used only as a rental property.
Please explain in laymens terms as the information in the tax code is vague
and confusing to me.

Probably not, as Florida doesn't have an individual income tax.
But......there may be some state or local taxes or fees that would be due on
property rentals.



house? Will the Mortgage tax due at the closing be deductible?

Your closing costs are part of your cost basis in the property, and as such
ar capitalized and depreciated over 28 years.




Yes, it's helpful, as when the time comes to replace one piece of furnishing
or appliance, you can remove that amount from your books and add the new
item.



You have to......or at least claim that you did when you sell the property.
so it benefits you to claim now what you'll have to in the end.


furnishings.

Depreciation is the method of spreading the expense over a number of years.
Residential rental property is generally depreciated over 27.5 years (or
about 28 tax returns). This would include the building (but not the land)
and any piece of furniture or appliance that is atached to the building
(like a central heating/air unit). Most of the other furnishings are
depreciated over 7 years.


255000 and the various furnishings at about 35000 to 40000.

And there is the land.

greatly
appreciated.


Is this a short-term rental property (like a vacation condo?) where the
average renter would be there for a short time?
Yes it is a short term rental and thanks for your interest and any other
advice you might have.......
 
C

Chiung Tien, CPA

You will have to collect and remit sales tax for any rental periods 6 months
or less.

Vinman said:
Someone Please help until I can find a local accountant:

Here are the facts:

I will be buting a house in Florida with my brother, we will be equal
owners. The house was built in 2000, is completely furnished, and the price
we will pay will be 277500. It will be used only as a rental property.
Please explain in laymens terms as the information in the tax code is vague
and confusing to me.
Here are my questions:

1
Will I have to file a state form for Florida?

2
What closing costs will be deductible, we both already own a primary
house? Will the Mortgage tax due at the closing be deductible?
3
Do I need to itemize the furnishings for depreciation? Should I depreciate
the house and the furnishings? And please explain depreciation as it applies
to the house and the furnishings.
To me this is a very confusing issue, as the building is valued at at
255000 and the various furnishings at about 35000 to 40000.
 
P

Paul

Chiung Tien said:
You will have to collect and remit sales tax for any
rental periods 6 months or less.


Is that Florida law?

Because it doesn't apply everywhere.
 
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J

Janice Davis

Chiung Tien said:
You will have to collect and remit sales tax for any rental periods 6 months
or less.
I don't think that is true in the state of FL. My parents own a rental
property there and have never had to collect and remit sales tax for any
rental periods.

Janice
 
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