So only someone making under 150k would be able to take active losses agaibst s rental if their not a real estate pro and/or isnt using their properrty as a short term rental?
I'm repairing my roof on a rental property. It's going to cost $20,000 plus to replace the waterproof membrane and using existing tiles. I also have solar panels, so the cost is even more to remove the panels and reinstall it. The roof repair is guaranteed for 10 years. It sounds like I need to depreciate over 10 years. I would like to take the full cost of repairs in one year. What are your thoughts?
to clarify- if I have one rental, and rent it out 3-4 weeks a year, and I'm a passive investor, then the mortgage interest and insurance, property tax, deprectiation on this rental property is NOT tax deductible on my regular income and capital gains from stock investments. Correct?
Hi Mike, thanks for educating the masses. this is something off the topic. But what about taxes on money gifted from parents if it is under $17800. The IRS website does say we don't need to report and pay tax. Also, can we break down the gift money per year in order to keep it under the stated threshold Thanks
My pleasure! And the answer is yes. If you can spread out a gift over multiple years that is the best way to avoid a gift tax filing. For 99.999% of people there will never be a tax on a gift, but there is a reporting requirement if the gift is above the threshold amount.
@@MoneyandLifeTV appreciate your prompt response..Also, I would really appreciate if you could make an informative video on CPAs search like Dos and don't s of hiring a one... Like any other profession, there are people out there who are just waiting to rip you off🥲
New subscriber here. Good content. Very informative. How about if one decides to sell the rental property? Do I have to add the depreciation back and pay capital gains? If so what part of the depreciation? Is it just the building and improvements? Love to have a video about this.
Hi, Thanks for the sub! Ya that is a bit more complex - Probably need a CPA for that one. In general, yes you may have to capture a portion of the depreciation taken as section 1250 gain in addition to normal capital gain taxes.
@@MoneyandLifeTV OH! Just a Portion? We heard the entire depreciation had to be recaptured? AND we learned the Accountant used the wrong value basis for past 15 years! Can we just get another Rental when we sell the first rental to avoid recapture in the year of sale? Thanks If you have video on this, please share.
If you are able to take the $25, 000 loss but the total of the repair was say 34000. Can the remainder become a passive loss for the next year or years?
I have rented out a house that i lived in and owned for 38 years prior to turning into a rental. This is longer than the 27.5 year standard term of depreciation. How could I approach developing a basis for depreciation? Could factors such as past repairs and renovations be pertinent?
Virtually unlimited. I have never seen irs challenge it. However if losses were excessive and it took a persons tax liability to 0 then they likely would challenge it if was happening for multiple years in a row. I have seen some businesses and farms get challenged for too many years of consecutive losses.
Am I active if I manage my STR listing? I clean it after it’s been rented. I do Any repairs needed. Property is 2 hours away so I travel to it to do these things. But I also have a remote job. Would I be considered active?
Yes. When you sell a rental property, any suspended passive losses you have in other properties can be used to offset the capital gains in that property.
Rental property deductions in Ohio. 1. Below fair rental value. Deduction. Yes 2. 4 months with no rental Income 2023. Deduction. Yes 3. Repairs / Supplies to Sell Unoccupied Property 2024. Deduction. Yes 4. New Roof February 2023? *** unsure if it's accurate deduction status *** 5. Should we get most of full 9600 of roof replacement vs. Depreciation? As to me it makes no sense that we'll take an almost 9600 loss? I think as a novice self tax preparer prior to this selling of property venture... 90% deduction for roof at best? Yes or No? 6. The capital gains should balance out. Approximately 30k minimum after Payoff/ expenses. etc... I think I've covered most inquiries here. 7. Utilities paid Unoccupied. Deduction. Yes Appreciate your knowledge and sharing of your time. Please correct by my numbers if I'm a bit inaccurate of my explanations. Thanks, Bill 👍 Have a safe and blessed New Years.
Hi , I am sorry, but I am not able to give specific tax advice over TH-cam as we are not engaged to work together. You would need to become a client. If you would like to book a consultation my hourly rate is currently $160 per hour. You can find how to contact me through my accounting practice at www.mikekellycpa.com. Thank you Mike
Good video. So many people have rental properties and Schedule E questions. Thanks!
Hi Bill! Thanks. A huge percent of my client base are real estate investors
Glad to see you make videos again. Would you consider the topic of how to minimize real estate capital gain tax and/or depreciation recapture? Thx
Great ideas! I will keep that in the back of my mind.
This is great thank you for taking your time and helping all of us.
My pleasure! The information is not easily found :)
Could you do a video about form 3115 for missed depreciation for rental properties?
Can you go from having passive loss on my rental, To an active loss down the road say 2-3 years
So only someone making under 150k would be able to take active losses agaibst s rental if their not a real estate pro and/or isnt using their properrty as a short term rental?
Always great advice and information!
Thanks for watching!
Airbnb is active if you are managing it
I'm repairing my roof on a rental property. It's going to cost $20,000 plus to replace the waterproof membrane and using existing tiles. I also have solar panels, so the cost is even more to remove the panels and reinstall it. The roof repair is guaranteed for 10 years. It sounds like I need to depreciate over 10 years. I would like to take the full cost of repairs in one year. What are your thoughts?
very helpful! thank you.
so passive loss are better financial decision than active loss ?
Sadly not many can even afford Real Estate these days so will have to just keep buying REITs in the mean time!
So true it is very sad most have not been cutout of the housing market. Reits and high yielding investments = the new rental property
to clarify- if I have one rental, and rent it out 3-4 weeks a year, and I'm a passive investor, then the mortgage interest and insurance, property tax, deprectiation on this rental property is NOT tax deductible on my regular income and capital gains from stock investments. Correct?
Hi Mike, thanks for educating the masses.
this is something off the topic. But what about taxes on money gifted from parents if it is under $17800. The IRS website does say we don't need to report and pay tax. Also, can we break down the gift money per year in order to keep it under the stated threshold
Thanks
My pleasure! And the answer is yes. If you can spread out a gift over multiple years that is the best way to avoid a gift tax filing. For 99.999% of people there will never be a tax on a gift, but there is a reporting requirement if the gift is above the threshold amount.
@@MoneyandLifeTV appreciate your prompt response..Also, I would really appreciate if you could make an informative video on CPAs search like Dos and don't s of hiring a one... Like any other profession, there are people out there who are just waiting to rip you off🥲
New subscriber here. Good content. Very informative. How about if one decides to sell the rental property? Do I have to add the depreciation back and pay capital gains? If so what part of the depreciation? Is it just the building and improvements? Love to have a video about this.
Hi, Thanks for the sub! Ya that is a bit more complex - Probably need a CPA for that one. In general, yes you may have to capture a portion of the depreciation taken as section 1250 gain in addition to normal capital gain taxes.
@@MoneyandLifeTV OH! Just a Portion? We heard the entire depreciation had to be recaptured? AND we learned the Accountant used the wrong value basis for past 15 years!
Can we just get another Rental when we sell the first rental to avoid recapture in the year of sale? Thanks
If you have video on this, please share.
If you are able to take the $25, 000 loss but the total of the repair was say 34000. Can the remainder become a passive loss for the next year or years?
Thank you ☺️
My pleasure! Thanks for watching 😊
I have rented out a house that i lived in and owned for 38 years prior to turning into a rental. This is longer than the 27.5 year standard term of depreciation. How could I approach developing a basis for depreciation? Could factors such as past repairs and renovations be pertinent?
Is a 'property manager' who own a rental considered a "Real Estate Professional "?
Or do you mean only Realtors ?
How many consecutive years of a loss on a property be allowed by the IRS?
Virtually unlimited. I have never seen irs challenge it. However if losses were excessive and it took a persons tax liability to 0 then they likely would challenge it if was happening for multiple years in a row. I have seen some businesses and farms get challenged for too many years of consecutive losses.
can passive losses carried forward be taken against capital gains if the property is sold?
Can you use your passive income to qualify for a mortgage loan?
Hi William, Generally yes, because a lender would look at this as part of your normal income (generally speaking).
Yes but you can’t write off too much or your DTI will be too high. They’re supposed to add back in things like taxes a depreciation
Am I active if I manage my STR listing? I clean it after it’s been rented. I do Any repairs needed. Property is 2 hours away so I travel to it to do these things. But I also have a remote job. Would I be considered active?
an passive losses carried forward on property A be taken against capital gains on property B, if the property B is sold?
can
Yes. When you sell a rental property, any suspended passive losses you have in other properties can be used to offset the capital gains in that property.
Crazy Laws... Tax should be Simple. Just Sales tax on Products and Services. that's enough
if I manage my rental property would I be considered active?
Yes you can. idk what he’s talking about being a real estate person
Great video ❤
Glad you liked it!! Thanks Annie :)
Rental property deductions in Ohio.
1. Below fair rental value.
Deduction. Yes
2. 4 months with no rental Income 2023.
Deduction. Yes
3. Repairs / Supplies to Sell Unoccupied Property 2024.
Deduction. Yes
4. New Roof February 2023?
*** unsure if it's accurate deduction status ***
5. Should we get most of full 9600 of roof replacement vs. Depreciation? As to me it makes no sense that we'll take an almost 9600 loss? I think as a novice self tax preparer prior to this selling of property venture...
90% deduction for roof at best?
Yes or No?
6. The capital gains should balance out. Approximately 30k minimum after Payoff/ expenses. etc...
I think I've covered most inquiries here.
7. Utilities paid Unoccupied.
Deduction. Yes
Appreciate your knowledge and sharing of your time. Please correct by my numbers if I'm a bit inaccurate of my explanations.
Thanks,
Bill 👍
Have a safe and blessed New Years.
Hi , I am sorry, but I am not able to give specific tax advice over TH-cam as we are not engaged to work together. You would need to become a client. If you would like to book a consultation my hourly rate is currently $160 per hour. You can find how to contact me through my accounting practice at www.mikekellycpa.com. Thank you
Mike
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'Promo sm' 👀