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Rental Property tax deduction questions.

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Old 01-20-2011, 03:56 AM   #1
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Rental Property tax deduction questions.

Ok, I own a double block about 4 miles from my house. I have two families that live in there. Now i have some questions regarding tax deductions forgive i am new to the landlord thing. Last year I claimed just my income, but didnt have too many expenses besides normal stuff Mortage interest, home depreciation and some direct bills such as sewer.

Now, I use my truck to collect rent, haul trash from yard waste and any general maint that pops up with the property. Is there any deductions I can make for vehicle use? I make about 25 avg trips to property 4 miles each way.

Cell Phone... I also get calls from the property on my cell phone for emergencies, is there a portion of bill I can deduct for this?

Lastly, Like lawn maintenance and snow removal, I just normally take care of myself. Can I deduct like 75 a month for general maint?

I am going to talk to a professional, just wanted to see if I can get some answers prior.

Thanks
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Old 01-20-2011, 07:28 AM   #2
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There is a form called Schedule E....That controls a lot of what you can/not not put down for a rental property. Rental property is not automatically a deduction- If you make money by renting-That is taxable. If you lose money or "paper loss" money- That is deductable.
You probably should keep a milelage log if you want to claim car expenses. Same for the property maint-If it's a repair or small upgrade- You can schedule it and then see what happens.
The cell phone is a bit stickier and you'll have to talk to your accountant about it. You are on call there- and it's not really a "business" perse and there isn't a steady use for the phone- You might get a single call in Jan and then get a call every other day in Feb...and that is hard to prove/value.

Good luck!!
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Old 01-20-2011, 08:30 AM   #3
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Its just things like that I have used but don't claim. I agree, the cell phone is a stretch, but again, its needed. For example, I bought 5 gals of paint that roughly costs a 100.00. I can deduct the 100.00 because I have a receipt. But, what about the 12 hours I spent painting the property? If I hired someone yes...I can claim, but since its my labor I cant. Why cant I pay myself minimum wage to paint? I do all of this to keep the rent low. I only charge 375 month per unit, tenants pay own bills except for sewer.

It seems like Uncle Sam is trying to keep the working man down. lol or in business depending how you look at it. Anyways, Thanks for the reply, its more of a rant now.
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Old 01-20-2011, 08:44 AM   #5
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Definitely get a good accountant. You will be able to deduct mileage, partial registration fees... and atleast a portion of the cell phone. I have never tried to bill out my own work for taxes but a fair question for the accountant.

Remember EVERYTHING is a repair not an improvement! (hint hint)
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Old 01-20-2011, 12:32 PM   #6
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Originally Posted by Fever View Post
Definitely get a good accountant. You will be able to deduct mileage, partial registration fees... and atleast a portion of the cell phone. I have never tried to bill out my own work for taxes but a fair question for the accountant.

Remember EVERYTHING is a repair not an improvement! (hint hint)

you bet... Thanks

PS Brunes... I do have everything documented but it dont add to much. It was just one of those years that I was over at property it seemed like every other week. Leaky fawcet. Ok, I get a call...Tom Kitchen sink wont stop leaking... Well, I leave my house go there rip apart fawcet figure out which gasket it needs, go to lowes for parts get back replace gasket, put sink back together. Ok that took 2.5 hours of my time. Gas 1 mile is to lowes, parts .35c. I have like 1.75 in gas and 35cents in parts that I can claim for total trip. I now have a whopping total of a 2.10 cents in parts and fuel.

Week Later, Tom Toilet is leaking, same thing go there rip toilet apart, put a 3.00 flange in and make the 1 mile trek to lowes..Its more time than money. Ohh the joys. I will look into schedule E form.
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Old 01-20-2011, 12:43 PM   #7
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When I had rentals, my accountant like me to use the "But For" rule.... Anything you spent or drove in support of the rental is deductable...

"But for this rental, I wouldn't have had to do this" So yes, mileage driven to collect rent, haul garbage, etc... is all deductable at the federal mileage allowance. You should keep logs though, dates and miles driven.

Cell phone is going to be tough unless you can get a per call cost or only use the phone in support of the rental.

Maintenance is also tough, I'm sure actual costs are deductable, tools, snow shovels, etc... but your time is a grey area. Ask your accountant.
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Old 01-20-2011, 12:45 PM   #8
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Quote:
Originally Posted by TACOMA TRD View Post
you bet... Thanks

PS Brunes... I do have everything documented but it dont add to much. It was just one of those years that I was over at property it seemed like every other week. Leaky fawcet. Ok, I get a call...Tom Kitchen sink wont stop leaking... Well, I leave my house go there rip apart fawcet figure out which gasket it needs, go to lowes for parts get back replace gasket, put sink back together. Ok that took 2.5 hours of my time. Gas 1 mile is to lowes, parts .35c. I have like 1.75 in gas and 35cents in parts that I can claim for total trip. I now have a whopping total of a 2.10 cents in parts and fuel.

Week Later, Tom Toilet is leaking, same thing go there rip toilet apart, put a 3.00 flange in and make the 1 mile trek to lowes..Its more time than money. Ohh the joys. I will look into schedule E form.
Don't look at it as "gas money". You use the federal rate, 2010 is $0.50/mile. (this is supposed to take into account car maintanence, wear and tear, gas, insurance, etc..)

so 25 trips @ 4 miles each is 100 miles or $50.
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Old 01-20-2011, 12:58 PM   #9
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Anything out of pocket is deductible including mileage at $0.50 per mile this year. You must have receipts for expenses and a log for your mileage.

Your time IS NOT deductible. If you pay someone it is deductible but not your personal time.

Depreciation for a residential rental is over 27.5 years using the straigt-line method. You can only depreciate the cost of the building, not the land. Certain components such as an air conditioner or dishwasher can be broken out and depreciated separately if the allocation is done at the property isd acquired. If you don't do it in the year of acquisition you can not go back and change it.

Get yourself a small book and write everything down as you spend money. It will make it much, much simpler to aggregate everything for your tax return.
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Old 01-20-2011, 01:16 PM   #10
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Anything out of pocket is deductible including mileage at $0.50 per mile this year. You must have receipts for expenses and a log for your mileage.

Your time IS NOT deductible. If you pay someone it is deductible but not your personal time.

Depreciation for a residential rental is over 27.5 years using the straigt-line method. You can only depreciate the cost of the building, not the land. Certain components such as an air conditioner or dishwasher can be broken out and depreciated separately if the allocation is done at the property isd acquired. If you don't do it in the year of acquisition you can not go back and change it.

Get yourself a small book and write everything down as you spend money. It will make it much, much simpler to aggregate everything for your tax return.
Thanks for the Info. I have a seperate account for the rental property. I pay everything in check form. I have all my receipts and will use the .50 mileage reimbursment.

The example I shown above. Master Plumber comes they charge $65 just for the service call 60.00 first hour and my .35C part always seems to 19.00 on their truck. That total bill would have been 144 for leaking fawcet. Ok to claim. My method with 35c part, does the IRS think that the same part gets magically put in? I guess its pay me now, or pay me later.

Thanks for the input, I really want to make sure what I claim is correct. Essentially this is how it went for me last year, If I had a receipt, fine. If not...out of luck.
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Old 01-20-2011, 01:22 PM   #11
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Quote:
Originally Posted by TACOMA TRD View Post
... Master Plumber comes they charge $65 just for the service call 60.00 first hour and my .35C part always seems to 19.00 on their truck. That total bill would have been 144 for leaking fawcet. Ok to claim. My method with 35c part, does the IRS think that the same part gets magically put in? I guess its pay me now, or pay me later.

...
Yep, unless you're a professional plumber by trade, they're not going to let you deduct your time.
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Old 01-20-2011, 01:46 PM   #12
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Guys, Thanks for letting me rant and knowing my luck someone here works for IRS and I am just probably pissing them off..Its just aggravating. I need a cell phone to answer calls, but generally the way its written is that I can claim the separate calls that were for the business purposes. Where does the IRS think I can get a cell phone plan that will allow me to pay by the call? It don't make sense. If I go out for the weekend and water is gushing from my property, how do they contact me for repairs with out a phone? Its not their job to call plumbers and stuff. Its mine. A landlord should be reachable for repairs.

I have two family dwelling with a separate business account with two separate address, how many properties does it take for the IRS to recognize it as a business? More than two? I guess I need some professional help, possibly look at more properties so I can write some things off.
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Old 01-20-2011, 01:59 PM   #13
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Here is a good reference book http://books.google.com/books?id=HEL...rental&f=false
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Old 01-20-2011, 02:15 PM   #14
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Thanks, I will read up. I like the part where its ok to use family members to do the work. That could be claimed. I guess my 11 yr old is going to be really busy next year. I ll be sure to track my miles as I drive him to the hardware store. JK


That link was really helpful. Thanks again.
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