Every Landlord's Tax Deduction Guide ~ 1st Edition

✍ Scribed by Stephen Fishman

• Publisher: Nolo
• Year: 2005
• Tongue: English
• Leaves: 459
• Edition: 1st
• Category: Library

✦ Synopsis

If you own rental property, you should be taking advantage of the many tax write-offs available. Every Landlord's Tax Deduction Guide gives residential landlords the plain-English guide they need to save money on taxes -- without the services of a high-priced accounting firm. This book explains how to maximize your deductions. Find out how to: fill out IRS Schedule E take real estate tax credits figure out if an expense is a repair (deductible) or an improvement (depreciable) maximize your depreciation deductions deduct losses arising from real estate ownership keep proper tax records *deduct home office, travel, casualty losses and much more Every Landlord's Tax Deduction Guide is comprehensive yet easy to read, jam packed with interesting and relevant examples.

✦ Table of Contents

Table of Contents......Page 10
Introduction......Page 16
A. Why You Need to Know About Tax Deductions......Page 17
B. The Ever-Changing Tax Laws......Page 18
C. Icons Used in This Book......Page 19
1. Tax Deduction Basics for Landlords......Page 20
A. How Landlords Are Taxed......Page 21
B. How Income Tax Deductions Work......Page 23
C. How Property Ownership Affects Taxes......Page 29
D. The IRS and the Landlord......Page 36
2. Landlord Tax Classifications......Page 42
B. Business Owner Versus Investor......Page 43
C. Are You Profit Motivated?......Page 48
D. Real Estate Dealers......Page 57
3. Deducting Your Operating Expenses......Page 64
A. Requirements for Deducting Operating Expenses......Page 65
B. Operating Expenses That Are Not Deductible......Page 71
4. Repairs......Page 74
A. Repair Versus Improvement......Page 75
B. The General Plan of Improvement Rule: A Trap for the Unwary......Page 83
C. How to Deduct Repairs......Page 87
D. Tips for Maximizing Your Repair Deductions......Page 90
5. Depreciation Basics......Page 94
A. Depreciation: The Landlord’s Best Tax Break......Page 96
B. Understanding the Basics......Page 97
C. How to Depreciate Buildings......Page 104
D. Depreciating Land Improvements......Page 116
E. Depreciating Personal Property......Page 118
F. When You Sell Your Property......Page 134
G. Tax Reporting and Record Keeping for Depreciation......Page 138
6. Maximizing Your Depreciation Deductions......Page 140
A. Determining the Value of Your Land and Buildings......Page 141
B. Segmented Depreciation......Page 150
7. Interest......Page 158
A. Interest Landlords Can (and Can’t) Deduct......Page 160
B. Mortgage Interest......Page 161
C. Other Interest Expenses......Page 164
D. Points and Prepaid Interest......Page 165
E. Interest on Construction Loans......Page 166
F. Loans with Low or No Interest......Page 167
G. Loans on Rental Property Used for Nonrental Purposes......Page 168
H. Keeping Track of Borrowed Money......Page 169
8. Start-Up Expenses......Page 172
A. What Are Start-Up Expenses?......Page 173
B. Determining Your Business Start Date......Page 175
C. Avoiding the Start-Up Rule’s Bite......Page 178
D. How to Deduct Start-Up Expenses......Page 179
E. If Your Business Doesn’t Last 15 Years......Page 183
F. If Your Business Never Begins......Page 184
9. The Home Office Deduction......Page 186
A. Qualifying for the Home Office Deduction......Page 187
B. Calculating the Home Office Deduction......Page 193
C. IRS Reporting Requirements......Page 204
D. Audit-Proofing Your Home Office Deduction......Page 205
E. Deducting an Outside Office......Page 207
10. Car and Local Transportation Expenses......Page 210
A. Deductible Local Transportation Expenses......Page 211
B. The Standard Mileage Rate......Page 215
C. The Actual Expense Method......Page 217
F. Reporting Transportation Expenses on Your Tax Return......Page 228
11. Travel Expenses......Page 230
A. What Are Travel Expenses?......Page 231
B. Deductible Travel Expenses......Page 235
C. How Much You Can Deduct......Page 237
D. Maximizing Your Travel Deductions......Page 247
12. Hiring Help......Page 250
A. Deducting Payments to Workers......Page 252
B. Employees Versus Independent Contractors......Page 254
C. Tax Rules When Hiring Independent Contractors......Page 260
D. Tax Rules for Employees......Page 267
E. Hiring Your Family......Page 271
F. Hiring a Resident Manager......Page 277
13. Casualty and Theft Losses......Page 280
A. What Is a Casualty?......Page 281
B. Calculating a Casualty Loss Deduction......Page 283
C. Disaster Area Losses......Page 288
D. Casualty Gains......Page 289
E. Tax Reporting and Record Keeping for Casualty Losses......Page 290
14. Additional Deductions......Page 292
B. Education Expenses......Page 294
D. Insurance for Your Rental Activity......Page 296
E. Legal and Professional Services......Page 298
F. Meals and Entertainment......Page 299
G. Taxes......Page 301
H. Unpaid Rent......Page 302
15. Vacation Homes......Page 304
A. The Vacation Home Tax Morass......Page 305
C. Tax-Free Vacation Home......Page 306
D. Vacation Home Used as Rental Property......Page 308
E. Vacation Home Used as Residence......Page 311
F. Calculating Personal and Rental Use......Page 315
G. Converting Your Home to a Rental Property......Page 319
16. Deducting Rental Losses......Page 320
A. What Are Rental Losses?......Page 322
B. Overview of the Passive Loss Rules......Page 323
C. The $25,000 Offset......Page 326
D. The Real Estate Professional Exemption......Page 332
E. Rental Activities Not Subject to PAL Real Property Rental Rules......Page 349
F. Vacation Homes......Page 350
G. Deducting Suspended Passive Losses......Page 351
H. Tax Reporting for Passive Rental Losses......Page 354
I. Strategies for Dealing with the Passive Loss Rules......Page 355
J. At-Risk Rules......Page 356
K. How to Deduct Rental Losses......Page 358
17. Record Keeping and Accounting......Page 362
A. Record Keeping Made Simple......Page 363
B. Accounting Methods......Page 390
C. Tax Years......Page 393
18. All About Schedule E......Page 396
A. Who Must File Schedule E?......Page 397
B. Filling Out Schedule E......Page 399
C. Schedule E Example......Page 404
19. Amending Your Tax Returns......Page 410
A. Reasons for Amending Your Tax Return......Page 411
B. Time Limits for Filing Amended Returns......Page 413
C. How to Amend Your Return......Page 416
D. How the IRS Processes Refund Claims......Page 417
20. Help Beyond This Book......Page 420
A. Secondary Sources of Tax Information......Page 421
B. The Tax Law......Page 426
C. Consulting a Tax Professional......Page 432
Index......Page 436