Taxes - Confusion

Comments(3)

• 
  myfrogger11th April, 2004

  Let me understand you correctly: You have one property that is used as a rental. You have had expenses for the property but no income. You want to deduct these expenses to offset personal income.
  
  If I understand you correctly, yes you can report a loss on your rental property but the correct form is Schedule E.
  
  If your expenses were less than $25,000 then you have no problem with the deduction as long as you make under $100,000 per year.
  
  If your expenses were more than $25,000 you must qualify as a "real estate professional" otherwise your deduction is limited to $25,000.
  
  Your wife's rental interest will also be reported on a sch E.
  
  I hope I answered your questions. GOOD LUCK

• 
  knucs11th April, 2004

  Thanks Frogger,
  
  Yes, thanks. Since I can qualify as a realestate professional, I can take those educational expenses (those expenses to my business - not directly related to that property) as a loss on sched. C , but if there is no profit, those loses carry over to next year, right? Or, because i'm a "pro", they can offset my wages for 2003?
  
  Kelly(WI)
  
  [ Edited by knucs on Date 04/11/2004 ][ Edited by knucs on Date 04/11/2004 ]

• 
  DaveT13th April, 2004

  Quote:Have alot of expenses on courses and meetings in 2003 and have 750 hrs of investing time.Managing your own rental property does not qualify you as a "real estate professional". The IRS has defined rental property activity as a passive income activity, by default, regardless of the level of your active participation. Your 750 hours is a personal investment in yourself, but does not make you a real estate professional.
  
  Quote:Got a Sub2 with a few thousand in acquisitions costs, but no realestate investment income (was available to rent before end of yr.).If you acquired the property for your rental property holdings, the property is "placed in service" on the date it is available and ready for rent. You take rental expenses on Schedule E from the date you placed the property in service, to include depreciation for a partial year in 2003, even though you have no rental income for 2003. In general, most acquisition costs are added to your cost basis (and increase your depreciation basis), and are not expensed on your Schedule E.
  
  Quote:I am sole member of an LLC. Have a full time job. Have an inherited 25% interest in a rental property for 2003 with some income(In my wife's name). Can my investing expenses reduce my wages for tax purposes?If you file a joint tax return, your wife claims her rental income and expenses for her rental property on Schedule E. You also claim your rental property income and expenses on Schedule E. You don't tell us what you are doing with your LLC, so right now that is just noise for this discussion.
  
  Quote:Schedule C for my property and schedule E for my wife's property? ???No. Both properties are in service as rentals, right? Schedule E for both properties.