Appreciate Some Answers...

Hello,

I realize that I have a # of Q's here and would GREATLY appreciate someone taking a few minutes to respond.

Can I depreciate an Investment property ( rental ) even if I only own it for a year then sell it ?
Is there a list for all the other items that can be depreciated ( appliances etc. )? What are the $ amounts & over what time period ?
Can I write off points and/or closing costs on Investment property ?
Can I write off ALL items purchased for the Investment property ?
Can I write off mileage associated with ANY aspect of doing REI ( i.e . going to model homes to see home plans/talk w/ sales man ; going to REI meetings ; going to store for purchase of Investment property items ; purchasing REI materials; time associated w/ performing ANY of the mentioned items ) ?
Where do I hold $ associated with each Investment property ( i.e. option credit, rent credit & rent $ ) ?
How do I transfer $ from REI to me safely ?
Who would get the tax benefits if there were more than one person partnering on an Investment property ?
How would the property need to be held so all partners would benefit evenly ?
How do I get around having too high of a Debt to Income ratio ( as gets you declined by Mortgage co.'s )?

Thanks !!

Comments(5)

  • commercialking5th December, 2004

    Well I am not a specialist in such matters and you must, of course review any advice given here with your accountant:


    > On 2004-12-05 21:21, leadman wrote:

    >Can I depreciate an Investment property ( rental ) even if I
    >only own it for a year then sell it ?

    Yes, however you will also recapture the depreciation when you sell.

    >Is there a list for all the other items that can be depreciated
    >( appliances etc. )? What are the $ amounts & over what
    >time period ?

    Yes, the IRS has a guideline for such matters, and I am sure somebody will post a URL or a section of the code.

    >Can I write off points and/or closing costs on Investment
    >property ?

    Yes.

    >Can I write off ALL items purchased for the Investment property ?

    Yes, except for those that must be depreciated.

    >Can I write off mileage associated with ANY aspect of
    >doing REI ( i.e . going to model homes to see home
    >plans/talk w/ sales man ; going to REI meetings ; going to
    >store for purchase of Investment property items ;
    >purchasing REI materials; time associated w/ performing
    >ANY of the mentioned items ) ?

    Yes to all of the above except your time.

    >Where do I hold $ associated with each Investment
    >property ( i.e. option credit, rent credit & rent $ ) ?

    I am not sure I understand this question.

    >How do I transfer $ from REI to me safely ?

    You account for such transfers on the Schedule E associated with the rental property.

    >Who would get the tax benefits if there were more than one
    >person partnering on an Investment property ?

    Depending on the form of ownership there is some lattitude in the answer to this question. An LLC, for example, can divide these benefits in a different proportion than an S or C corporation can.

    >How would the property need to be held so all partners
    >would benefit evenly ?

    The more popular choice these days appears to be an LLC although an S corporation would accomplish about the same end.

    >How do I get around having too high of a Debt to Income
    >ratio ( as gets you declined by Mortgage co.'s )?

    Most lenders will allow 75% of the operating income from rental income to count toward your income for purpose of calculating your DCR.

  • leadman5th December, 2004

    Appreciate your input & your time !

  • leadman5th December, 2004

    Sorry for the double reply.
    Does that mean that the tax saved from the depreciation will be taken at the sale - basically nulling the benfit ?

  • commercialking5th December, 2004

    Essentially yes. Unless you do a 1031 exchange in which case the depreciation loss rolls forward into the basis of the new property and is recaptured only when that property is sold.

  • leadman5th December, 2004

    Back to my original post...

    >Where do I hold $ associated with each Investment
    >property ( i.e. option credit, rent credit & rent $ ) ?

    Do I hold all $ associated with this property in its own bank account ? Or can multiple properties $'s be held in the same account under the same LLC or do I need a different LLC & different bank account for each property ?

    Thanks

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