Every Landlord's Tax Deduction Guide

✍ Scribed by Stephen Fishman J.D.

• Publisher: NOLO
• Year: 2007
• Tongue: English
• Leaves: 476
• Edition: 4
• Category: Library

✦ Synopsis

This bestseller is the only book on tax deductions specifically for residential landlords! Named a "Top 10 Real Estate Book" by Robert Bruss, syndicated real estate columnist. 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 and casualty losses -- and much more! Every Landlord's Tax Deduction Guide is comprehensive yet easy to read, jam-packed with interesting and relevant examples. The 4th edition is completely updated for 2008 and reflects the latest tax information and numbers.

✦ Table of Contents

Table of Contents......Page 9
Introduction: Your Tax Deduction Companion for Landlords......Page 15
1. Tax Deduction Basics for Landlords......Page 19
How Landlords Are Taxed......Page 20
How Income Tax Deductions Work......Page 22
How Property Ownership Affects Taxes......Page 29
The IRS and the Landlord......Page 38
2. Landlord Tax Classifications......Page 45
Business Owner Versus Investor......Page 46
Are You Profit Motivated?......Page 51
Real Estate Dealers......Page 61
3. Deducting Your Operating Expenses......Page 67
Requirements for Deducting Operating Expenses......Page 68
Operating Expenses That Are Not Deductible......Page 74
4. Repairs......Page 77
Repair Versus Improvement......Page 78
The General Plan of Improvement Rule: A Trap for the Unwary......Page 87
How to Deduct Repairs......Page 91
Tips for Maximizing Your Repair Deductions......Page 94
5. Depreciation Basics......Page 97
Depreciation: The Landlord’s Best Tax Break......Page 99
Understanding the Basics......Page 100
How to Depreciate Buildings......Page 107
Depreciating Land Improvements......Page 120
Depreciating Personal Property......Page 121
When You Sell Your Property......Page 138
Tax Reporting and Record Keeping for Depreciation......Page 144
6. Maximizing Your Depreciation Deductions......Page 147
Determining the Value of Your Land and Buildings......Page 148
Segmented Depreciation......Page 158
7. Interest......Page 165
Interest Landlords Can (and Can’t) Deduct......Page 166
Mortgage Interest......Page 167
Other Interest Expenses......Page 170
Points and Prepaid Interest......Page 171
Interest on Construction Loans......Page 172
Loans With Low or No Interest......Page 173
Loans on Rental Property Used for Nonrental Purposes......Page 174
Keeping Track of Borrowed Money......Page 175
8. Start-Up Expenses......Page 177
What Are Start-Up Expenses?......Page 178
Determining Your Business Start Date......Page 180
Avoiding the Start-Up Rule’s Bite......Page 183
How to Deduct Start-Up Expenses......Page 184
If Your Business Never Begins......Page 189
9. The Home Office Deduction......Page 191
Qualifying for the Home Office Deduction......Page 192
Calculating the Home Office Deduction......Page 199
Audit-Proofing Your Home Office Deduction......Page 210
Deducting an Outside Office......Page 212
10. Car and Local Transportation Expenses......Page 215
Deductible Local Transportation Expenses......Page 216
The Standard Mileage Rate......Page 220
The Actual Expense Method......Page 223
Reporting Transportation Expenses on Your Tax Return......Page 234
11. Travel Expenses......Page 237
What Are Travel Expenses?......Page 238
Deductible Travel Expenses......Page 242
How Much You Can Deduct......Page 244
Maximizing Your Travel Deductions......Page 254
12. Hiring Help......Page 257
Deducting Payments to Workers......Page 259
Employees Versus Independent Contractors......Page 261
Tax Rules When Hiring Independent Contractors......Page 267
Tax Rules for Employees......Page 274
Hiring Your Family......Page 278
Hiring a Resident Manager......Page 285
13. Casualty and Theft Losses......Page 289
What Is a Casualty?......Page 290
Calculating a Casualty Loss Deduction......Page 292
Disaster Area Losses......Page 297
Casualty Gains......Page 298
Tax Reporting and Record Keeping for Casualty Losses......Page 299
14. Additional Deductions......Page 301
Education Expenses......Page 303
Gifts......Page 305
Insurance for Your Rental Activity......Page 306
Legal and Professional Services......Page 307
Meals and Entertainment......Page 309
Taxes......Page 311
Unpaid Rent......Page 312
15. Vacation Homes......Page 315
The Vacation Home Tax Morass......Page 316
Tax-Free Vacation Home......Page 317
Vacation Home Used as Rental Property......Page 319
Vacation Home Used as Residence......Page 322
Calculating Personal and Rental Use......Page 326
Converting Your Home to a Rental Property......Page 330
16. Deducting Rental Losses......Page 331
What Are Rental Losses?......Page 333
Overview of the Passive Loss Rules......Page 334
The $25,000 Offset......Page 337
The Real Estate Professional Exemption......Page 343
Rental Activities Not Subject to PAL Real Property Rental Rules......Page 360
Vacation Homes......Page 361
Deducting Suspended Passive Losses......Page 363
Tax Reporting for Passive Rental Losses......Page 365
Strategies for Dealing With the Passive Loss Rules......Page 366
At-Risk Rules......Page 368
How to Deduct Rental Losses......Page 370
17. Record Keeping and Accounting......Page 375
Record Keeping Made Simple......Page 376
Accounting Methods......Page 403
Tax Years......Page 407
18. All About Schedule E......Page 409
Who Must File Schedule E?......Page 410
Filling Out Schedule E......Page 412
Schedule E Example......Page 417
19. Claiming Tax Deductions for Prior Years......Page 423
Reasons for Amending Your Tax Return......Page 424
Time Limits for Filing Amended Returns......Page 425
How to Amend Your Return......Page 427
How the IRS Processes Refund Claims......Page 428
20. Help Beyond This Book......Page 431
Secondary Sources of Tax Information......Page 432
The Tax Law......Page 437
Consulting a Tax Professional......Page 444
Index......Page 447