Rental Property


D

Drew27410

I'm helping a friend with her taxes, and realized that the rental
income from a trailer she owns has never been declared. At first
glance she is afraid about how much her taxes would go up, but I
realize that there would be deductions as well.

This trailer is fully paid for years ago. To depreciate the trailer
and offset the income, would she just take the current value of the
trailer and devide by the estimated useful life? Is there a published
guideline on the estimated useful life for mobile homes, or is that
just done by educated guess? Having never declared the income, or
deducted any expenses, does she need to amend her returns for the last
three years to get this started?

Thanks for your time.
 
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H

Harlan Lunsford

Drew27410 said:
I'm helping a friend with her taxes, and realized that the rental
income from a trailer she owns has never been declared. At first
glance she is afraid about how much her taxes would go up, but I
realize that there would be deductions as well.

This trailer is fully paid for years ago. To depreciate the trailer
and offset the income, would she just take the current value of the
trailer and devide by the estimated useful life? Is there a published
guideline on the estimated useful life for mobile homes, or is that
just done by educated guess? Having never declared the income, or
deducted any expenses, does she need to amend her returns for the last
three years to get this started?

Thanks for your time.
Need to go back to first year of rental and determine depreciable basis
of the property. That would be cost OR fair market value (fmv) of it
at THAT time. Then construct a depreciation chart showing depreciation
for each year, using only the 2008 depreciation (basis/27.5) for
reporting 2008 income.

Whether she amends previous returns is her call.

ChEAr$,
Harlan Lunsford, EA n LA
 

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