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RhizzleBop said:   As you may recall from prior posts, we moved in the summer and started rented our old house in August.
I'm trying to figure out what I need info wise to get my taxes filed.

I think figuring out my cost basis for depreciation of the house is key.

I bought it in 2008, and it was primary residence until this summer.

I purchased it at 119K.  The value dropped a little in the recession to around 110K.

During the years, I put probably 20K worth of updates from sweat equity including granite bathroom counter, tiling floors, new counters, fixtures, appliances, etc.

I don't have any contractor invoices, but I do have all my Lowes receipts from this year.

Can anyone advise how to go about determining the starting point value? ( I think I can divide that value by 27.5 and take that much tax deduction each year...correct?)

  

We discussed this recently above.

https://www.irs.gov/publications/p527/ch02.html

"Basis of Depreciable Property
The basis of property used in a rental activity is generally its adjusted basis when you place it in service in that activity. This is its cost or other basis when you acquired it, adjusted for certain items occurring before you place it in service in the rental activity.

If you depreciate your property under MACRS, you may also have to reduce your basis by certain deductions and credits with respect to the property.

Basis and adjusted basis are explained in the following discussions.

If you used the property for personal purposes before changing it to rental use, its basis for depreciation is the lesser of its adjusted basis or its fair market value when you change it to rental use. See Basis of Property Changed to Rental Use in chapter 4." 


So the basis is the lower of the amount you paid or what fair market value was when you rented it.
What was the property worth when you rented it?        

You can adjust the basis with the cost of "additions and improvements".    You can not include your own labor.   You can't add the value of repairs in the basis.   

Also keep in mind you only depreciate the value of the BUILDING and not the land.    You have to figure the value of building and land and then only depreciate the building.   
An appraisal or tax assessment might show the building and land values separately.

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appocollege said:   Does anyone have an opinion on which is better in the long run, flipping a property, wholesale or general real estate? Which would you say is overall easier, least costly etc.
  flipping/wholesale is worse from a tax perspective in the long run. Long run, you only pay long term cap gain on a rental

rated:
rufflesinc said:   
appocollege said:   Does anyone have an opinion on which is better in the long run, flipping a property, wholesale or general real estate? Which would you say is overall easier, least costly etc.
  flipping/wholesale is worse from a tax perspective in the long run. Long run, you only pay long term cap gain on a rental

  
I haven't done any flipping myself.   But it doesn't strike me as "easier".   
 

rated:
ops

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jerosen said:   
RhizzleBop said:   As you may recall from prior posts, we moved in the summer and started rented our old house in August.
I'm trying to figure out what I need info wise to get my taxes filed.

I think figuring out my cost basis for depreciation of the house is key.

I bought it in 2008, and it was primary residence until this summer.

I purchased it at 119K.  The value dropped a little in the recession to around 110K.

During the years, I put probably 20K worth of updates from sweat equity including granite bathroom counter, tiling floors, new counters, fixtures, appliances, etc.

I don't have any contractor invoices, but I do have all my Lowes receipts from this year.

Can anyone advise how to go about determining the starting point value? ( I think I can divide that value by 27.5 and take that much tax deduction each year...correct?)

  

We discussed this recently above.

https://www.irs.gov/publications/p527/ch02.html 

"Basis of Depreciable Property
The basis of property used in a rental activity is generally its adjusted basis when you place it in service in that activity. This is its cost or other basis when you acquired it, adjusted for certain items occurring before you place it in service in the rental activity.

If you depreciate your property under MACRS, you may also have to reduce your basis by certain deductions and credits with respect to the property.

Basis and adjusted basis are explained in the following discussions.

If you used the property for personal purposes before changing it to rental use, its basis for depreciation is the lesser of its adjusted basis or its fair market value when you change it to rental use. See Basis of Property Changed to Rental Use in chapter 4." 


So the basis is the lower of the amount you paid or what fair market value was when you rented it.
What was the property worth when you rented it?        

You can adjust the basis with the cost of "additions and improvements".    You can not include your own labor.   You can't add the value of repairs in the basis.   

Also keep in mind you only depreciate the value of the BUILDING and not the land.    You have to figure the value of building and land and then only depreciate the building.   
An appraisal or tax assessment might show the building and land values separately.

  
Ok, thank you
I did not get an appraisal when we started to rent.
I can review the tax assessment from this year and last year, and see what the averge middle is which would be mid 2016. However, seems tax assessments around here are always low.   My insurance company values the home a lot higher than zillow or taxes does, can I use that?

Zillow says $115K in July 2016.  I paid 119K, but zillow also has usually been low compared to actual resell value, and zillow knows nothing of upgrades I've done.
Can I add X value based on materials to  upgrade? (But does that require all receipts for materials)?

Current 2016 tax records show assessed value of 101K for home, 18.5 for the land.  But, again, those are always low.

Sounds like the safest thing is to use the zillow value of 115K from July 2016, and subtract 20K for land.   Can't really count improvements I made as there is no documentation to support it.

One more note, just for comparison how zillow and tax assessor is low, the rent is going for $200 more than what zillow says.

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I'm not an accountant...

The tax records are claiming $101k for the house and $18.5k for the land. You can use that to claim that the land is 15% of the value and house 85%.

I don't think you can use the insurance value. Don't they generally quote "replacement value" rather than market value? Those aren't the same.

I think using Zillow or tax assessment is OK as far as the IRS is concerned. You just need some documentation that substantiates the value. They don't expect you to pay for an appraisal to assess it. IIRC my accountant asked about tax records or zillow etc. to figure our basis.

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jerosen said:   I'm not an accountant...

The tax records are claiming $101k for the house and $18.5k for the land. You can use that to claim that the land is 15% of the value and house 85%.

I don't think you can use the insurance value. Don't they generally quote "replacement value" rather than market value? Those aren't the same.

I think using Zillow or tax assessment is OK as far as the IRS is concerned. You just need some documentation that substantiates the value. They don't expect you to pay for an appraisal to assess it. IIRC my accountant asked about tax records or zillow etc. to figure our basis.

  
Thanks for the tip, I appreciate it.

I'm trying to figure out a couple things in TurboTax online.

1. I don't see where I take the 1/27.5 deduction of the value.  I went through that section, and it asked about expenses greater than $2,500 or less than $2,500 but I didn't think overall depreciation was in that section.  I got to the end, and there was never anything asked again about depreciating the overall value.  I thought at some screen it would just ask if I wanted to take a straight line deduction of some amount and I'd say yes, enter the amount and done.

2.  When computing whethee I made or lost money in 2016, do I go from the date the lease was signed, or the date I marketed the home for rent?  I ask because we listed the home first week of July.  We moved out of the home July 19th.  
We rented the home Sept 8th.   We paid the mortgage while it was on the market, so I'd say those were loses, but not sure the IRS sees it that way.

Thanks

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https://www.irs.gov/publications/p527/ch01.html#en_US_2016_publi...

"Pre-rental expenses. You can deduct your ordinary and necessary expenses for managing, conserving, or maintaining rental property from the time you make it available for rent."

so normally then I think they'd let you deduct expenses after you list it.
However in your case you didn't move out until July 19th, so I don't think you'd be able to claim any expenses previous to that.

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rufflesinc said:   
appocollege said:   Does anyone have an opinion on which is better in the long run, flipping a property, wholesale or general real estate? Which would you say is overall easier, least costly etc.
  flipping/wholesale is worse from a tax perspective in the long run. Long run, you only pay long term cap gain on a rental

for the majority of us, starting out the best way is to renovate the house you live in and then move every 2-3 years. that way you can take your time, learn some stuff and you also pay zero taxes.

later - it's really about what works for you. I have done lots of flips, plenty wholesaling and beaucoup rentals....i will say this: flips require a level of precision and management that most people just can't do....or at least, don't want to do. they're much harder on the whole, because you are managing contractors and budgets and the room for error is smaller because you have to reconcile cost overruns and added work scope NOW. with landlording you can just make up shortfalls over the course of years. also, for people with full-time jobs a flip will be exhausting. i get burned out on them and have to take breaks from time to time and just do easy ol' landlording for awhile. but then i crave the activity and the payoff and start another, lol.

the absolute fundamental, critical skills to MAXIMIZE profit are: 1) an intimate knowledge of your local market and confidence in your ability to assess value, and 2) understanding of building trades, such that you can accurately predict the cost to repair or improve something. good landlords and good flippers have these in spades. you can lack a little bit in these areas, but i promise you won't make nearly as much money.

some of us employ the classic landlord strategy that takes already-good property, typically not acquired through distressed sales or what have you, in good areas and makes ~8%/year on it. this is fine, and with sufficient leverage can be pretty profitable in the long term as mortgages get paid off. but IMO you still gotta have the 2 basic skills. otherwise just buy a REIT and let the pros do it.

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In turbot ax I'm trying to enter my rental depreciation.  
Per earlier posts I've figured out the total value is 117K, and the land is worth 21K of that.
That leaves 96K.  Dividing by 27.5, says that the depreciale value is around 3.4K. 
If I didn't start renting it till July of this year, thats 50% of 2016.   So, I'd think my depreciation would be around 1.7K tax deductible.

Instead TurboTax is telling me $817 dollars is my depreciation.  I havn't finished the entire taxes yet, but I THINK that basically means, I only get $817 deducted from my income for tax purposes. (probably a $200 net savings)  That doesn't seem right at all.

Can anyone suggest what I might be entering wrong?

Thanks

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I am selling a house. It's been under contract for several weeks, supposed to close next week. Buyer wants an extension. Buyer made a cash offer but I suspect they are trying to get financing. I told buyer's agent that it will cost $50 per day. She asked if the total amount ($50/day from now until the new closing date) can be added to the EMD currently in escrow.

Anybody have an opinion on this? If the sale closes I won't get any additional monies, but if the buyer backs out I should. If the buyer doesnt come through, I expect to get the EMD because they have limited contingencies left (as-is property, needs work...they'd need to claim some material change in condition).

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solarUS said:   I am selling a house. It's been under contract for several weeks, supposed to close next week. Buyer wants an extension. Buyer made a cash offer but I suspect they are trying to get financing. I told buyer's agent that it will cost $50 per day. She asked if the total amount ($50/day from now until the new closing date) can be added to the EMD currently in escrow.

Anybody have an opinion on this? If the sale closes I won't get any additional monies, but if the buyer backs out I should. If the buyer doesnt come through, I expect to get the EMD because they have limited contingencies left (as-is property, needs work...they'd need to claim some material change in condition).

  I've done this. Ask for an amendment that says "Buyer to pay Seller a Per diem to equal $50 per day from [date] to the close of escrow." Don't add to the EMD.

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87pathfinder said:   
solarUS said:   I am selling a house. It's been under contract for several weeks, supposed to close next week. Buyer wants an extension. Buyer made a cash offer but I suspect they are trying to get financing. I told buyer's agent that it will cost $50 per day. She asked if the total amount ($50/day from now until the new closing date) can be added to the EMD currently in escrow.

Anybody have an opinion on this? If the sale closes I won't get any additional monies, but if the buyer backs out I should. If the buyer doesnt come through, I expect to get the EMD because they have limited contingencies left (as-is property, needs work...they'd need to claim some material change in condition).

  I've done this. Ask for an amendment that says "Buyer to pay Seller a Per diem to equal $50 per day from [date] to the close of escrow." Don't add to the EMD.
 

then where is the money transferred? into a separate escrow? i want to have the additional funds regardless of whether they close.

update: i have requested Title to open a separate escrow for these funds. that way they aren't commingled, and the terms on the second escrow will be restricted to "refundable only upon sale."

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solarUS said:   
87pathfinder said:   
solarUS said:   I am selling a house. It's been under contract for several weeks, supposed to close next week. Buyer wants an extension. Buyer made a cash offer but I suspect they are trying to get financing. I told buyer's agent that it will cost $50 per day. She asked if the total amount ($50/day from now until the new closing date) can be added to the EMD currently in escrow.

Anybody have an opinion on this? If the sale closes I won't get any additional monies, but if the buyer backs out I should. If the buyer doesnt come through, I expect to get the EMD because they have limited contingencies left (as-is property, needs work...they'd need to claim some material change in condition).

  I've done this. Ask for an amendment that says "Buyer to pay Seller a Per diem to equal $50 per day from [date] to the close of escrow." Don't add to the EMD.

then where is the money transferred? into a separate escrow? i want to have the additional funds regardless of whether they close.

update: i have requested Title to open a separate escrow for these funds. that way they aren't commingled, and the terms on the second escrow will be restricted to "refundable only upon sale."

Solar, what you said sounds contradictory to me, am I reading it right?
1) i want to have the additional funds regardless of whether they close.
2) the terms on the second escrow will be restricted to "refundable only upon sale."

If the per diem is refundable upon sale, and the deal closes, you won't get the per diem. Seems the second escrow should be non-refundable if the close date goes beyond the current close date (meaning the buyer is making use of the extension).

BTW, the way I did it was not as a separate escrow. I was expecting the buyer to close, so the per diem just became additional funds he needed to bring to close.  

Hope I'm clear, and that this helps.

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Hi everyone, I wanted to bring back up the topic of curry smell. I own a two family in NJ was was wondering how hard is it to get out the curry smell? Current tenant is moving out after a few years (no problems) and I've had some Indian folks look at it.

Is the smell really as bad as the horror stories lead me to believe online, especially since I live right upstairs above them. They seem like very nice people, but am slightly afraid of being suffocated by the smell getting into my living room and bedroom above them and of the potential smell left if they leave after a year.

rated:
It's going to be tricky. You'll have to tackle it as soon as you notice it. It takes a lot to get the smell out, you basically have to wash all surfaces to get it out, same as a smoking smell.

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droekturn said:   Hi everyone, I wanted to bring back up the topic of curry smell. I own a two family in NJ was was wondering how hard is it to get out the curry smell? Current tenant is moving out after a few years (no problems) and I've had some Indian folks look at it.

Is the smell really as bad as the horror stories lead me to believe online, especially since I live right upstairs above them. They seem like very nice people, but am slightly afraid of being suffocated by the smell getting into my living room and bedroom above them and of the potential smell left if they leave after a year.

  A powerful kitchen exhaust fan is not that expensive to install, and you can include in your lease terms that an exhaust be used or tenants responsible for expenses for odor removal upon move out.

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whatSay said:   
droekturn said:   Hi everyone, I wanted to bring back up the topic of curry smell. I own a two family in NJ was was wondering how hard is it to get out the curry smell? Current tenant is moving out after a few years (no problems) and I've had some Indian folks look at it.

Is the smell really as bad as the horror stories lead me to believe online, especially since I live right upstairs above them. They seem like very nice people, but am slightly afraid of being suffocated by the smell getting into my living room and bedroom above them and of the potential smell left if they leave after a year.

  A powerful kitchen exhaust fan is not that expensive to install, and you can include in your lease terms that an exhaust be used or tenants responsible for expenses for odor removal upon move out.

  if you are worried about duct work to exhaust to outside, you can buy a big charcoal filter  that the duct runs into, on Amazon instead. works just as good as exhaust to outside

rated:
whatSay said:   
droekturn said:   Hi everyone, I wanted to bring back up the topic of curry smell. I own a two family in NJ was was wondering how hard is it to get out the curry smell? Current tenant is moving out after a few years (no problems) and I've had some Indian folks look at it.

Is the smell really as bad as the horror stories lead me to believe online, especially since I live right upstairs above them. They seem like very nice people, but am slightly afraid of being suffocated by the smell getting into my living room and bedroom above them and of the potential smell left if they leave after a year.

  A powerful kitchen exhaust fan is not that expensive to install, and you can include in your lease terms that an exhaust be used or tenants responsible for expenses for odor removal upon move out.

  
That really, really, realllllllllly depends on where the stove is, interior wall versus exterior, 1 story versus 2 story...etc, etc..  

So a $12 filter like below will take care of curry smell?

https://www.amazon.com/Broan-BP58-Non-Ducted-Charcoal-Replacemen...

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drew2money said:   
whatSay said:   
droekturn said:   Hi everyone, I wanted to bring back up the topic of curry smell. I own a two family in NJ was was wondering how hard is it to get out the curry smell? Current tenant is moving out after a few years (no problems) and I've had some Indian folks look at it.

Is the smell really as bad as the horror stories lead me to believe online, especially since I live right upstairs above them. They seem like very nice people, but am slightly afraid of being suffocated by the smell getting into my living room and bedroom above them and of the potential smell left if they leave after a year.

  A powerful kitchen exhaust fan is not that expensive to install, and you can include in your lease terms that an exhaust be used or tenants responsible for expenses for odor removal upon move out.

  
That really, really, realllllllllly depends on where the stove is, interior wall versus exterior, 1 story versus 2 story...etc, etc..  

So a $12 filter like below will take care of curry smell?

https://www.amazon.com/Broan-BP58-Non-Ducted-Charcoal-Replacement/dp/B000BP7MMS/ref=sr_1_2?ie=UTF8&qid=1485997062&sr=8-2&keywords=Range+Hood+Charcoal+Filter

  i dont cook curry but this works amazing

https://www.amazon.com/gp/product/B008NYF8S4/ref=oh_aui_search_d...

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rufflesinc said:   
drew2money said:   
whatSay said:   
droekturn said:   Hi everyone, I wanted to bring back up the topic of curry smell. I own a two family in NJ was was wondering how hard is it to get out the curry smell? Current tenant is moving out after a few years (no problems) and I've had some Indian folks look at it.

Is the smell really as bad as the horror stories lead me to believe online, especially since I live right upstairs above them. They seem like very nice people, but am slightly afraid of being suffocated by the smell getting into my living room and bedroom above them and of the potential smell left if they leave after a year.

  A powerful kitchen exhaust fan is not that expensive to install, and you can include in your lease terms that an exhaust be used or tenants responsible for expenses for odor removal upon move out.

  
That really, really, realllllllllly depends on where the stove is, interior wall versus exterior, 1 story versus 2 story...etc, etc..  

So a $12 filter like below will take care of curry smell?

https://www.amazon.com/Broan-BP58-Non-Ducted-Charcoal-Replacement/dp/B000BP7MMS/ref=sr_1_2?ie=UTF8&qid=1485997062&sr=8-2&keywords=Range+Hood+Charcoal+Filter

  i dont cook curry but this works amazing

https://www.amazon.com/gp/product/B008NYF8S4/ref=oh_aui_search_detailpage?ie=UTF8&psc=1

 This!! Works on "herbs" too.

rated:
87pathfinder said:   
solarUS said:   
87pathfinder said:   
solarUS said:   I am selling a house. It's been under contract for several weeks, supposed to close next week. Buyer wants an extension. Buyer made a cash offer but I suspect they are trying to get financing. I told buyer's agent that it will cost $50 per day. She asked if the total amount ($50/day from now until the new closing date) can be added to the EMD currently in escrow.

Anybody have an opinion on this? If the sale closes I won't get any additional monies, but if the buyer backs out I should. If the buyer doesnt come through, I expect to get the EMD because they have limited contingencies left (as-is property, needs work...they'd need to claim some material change in condition).

  I've done this. Ask for an amendment that says "Buyer to pay Seller a Per diem to equal $50 per day from [date] to the close of escrow." Don't add to the EMD.

then where is the money transferred? into a separate escrow? i want to have the additional funds regardless of whether they close.

update: i have requested Title to open a separate escrow for these funds. that way they aren't commingled, and the terms on the second escrow will be restricted to "refundable only upon sale."

Solar, what you said sounds contradictory to me, am I reading it right?
1) i want to have the additional funds regardless of whether they close.
2) the terms on the second escrow will be restricted to "refundable only upon sale."

If the per diem is refundable upon sale, and the deal closes, you won't get the per diem. Seems the second escrow should be non-refundable if the close date goes beyond the current close date (meaning the buyer is making use of the extension).

BTW, the way I did it was not as a separate escrow. I was expecting the buyer to close, so the per diem just became additional funds he needed to bring to close.  

Hope I'm clear, and that this helps.

FYI - just to close this loop. I got the extension money placed in escrow with my broker, instead of with Title. Title said they always require signed agreement from all parties to release EMDs. My broker, however, will much more likely default to my keeping the funds on my side, in the event of a dispute.

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rufflesinc said:   appocollege said:   Does anyone have an opinion on which is better in the long run, flipping a property, wholesale or general real estate? Which would you say is overall easier, least costly etc.
  flipping/wholesale is worse from a tax perspective in the long run. Long run, you only pay long term cap gain on a rental



Flipping is a job.

Rentals are an investment.

rated:
rufflesinc said:   
appocollege said:   Does anyone have an opinion on which is better in the long run, flipping a property, wholesale or general real estate? Which would you say is overall easier, least costly etc.
  flipping/wholesale is worse from a tax perspective in the long run. Long run, you only pay long term cap gain on a rental

what is "long run"? every year you make money on it, you're gonna pay according to your prevailing tax rate - not cap gains rate. that's "long run" as far as I'm concerned. When you sell ultimately, yes the actual profit will be at the cap gains rate (if Congress keeps that, of course)....but all the depreciation you took will be at your prevailing tax rate, capped at 25%.

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rascott said:   
rufflesinc said:   
appocollege said:   Does anyone have an opinion on which is better in the long run, flipping a property, wholesale or general real estate? Which would you say is overall easier, least costly etc.
  flipping/wholesale is worse from a tax perspective in the long run. Long run, you only pay long term cap gain on a rental



Flipping is a job.

Rentals are an investment.

  
Finding new homes to turn into rentals is becoming a job..homes are selling fast.

rated:
I am a new landlord and need help with determining tax deductions:

A) Moved to a new Home in Nov 2016. Lived in the old home for over 7 years.
B) Made previous home available for rent in Dec 2016, used an realtor to rent agent, they charged 80% of a month's rent as commission.
C) Home was rented starting Jan 2017, contract signed Dec 22 and lease executed Dec 27.
D) Deposit and Jan 2017 Rent was paid on Dec 27th
E) Property per zillow values at $295K as of Dec 2016, County's appraisal was $242K ( 182K improvement, 60K land)

My questions.
For deduction that I take on the property for Tax year 2016:
a) Can I take realtor commission and other costs in rental preparation (carpet cleaning, lock add/changes) as deductions
b) Do i start taking depreciation in TAX year 2016, what will be cost basis , zillow being higher than county

Taxes going forward :
a) Is there an advantage in selling the property before the end of 5 years to forgo taxes on the appreciation ( 2 years
b) What tax rate will apply if sell the property after 5 years


Appreciate all help

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washin said:   I am a new landlord and need help with determining tax deductions:

A) Moved to a new Home in Nov 2016. Lived in the old home for over 7 years.
B) Made previous home available for rent in Dec 2016, used an realtor to rent agent, they charged 80% of a month's rent as commission.
C) Home was rented starting Jan 2017, contract signed Dec 22 and lease executed Dec 27.
D) Deposit and Jan 2017 Rent was paid on Dec 27th
E) Property per zillow values at $295K as of Dec 2016, County's appraisal was $242K ( 182K improvement, 60K land)

My questions.
For deduction that I take on the property for Tax year 2016:
a) Can I take realtor commission and other costs in rental preparation (carpet cleaning, lock add/changes) as deductions
b) Do i start taking depreciation in TAX year 2016, what will be cost basis , zillow being higher than county

Taxes going forward :
a) Is there an advantage in selling the property before the end of 5 years to forgo taxes on the appreciation ( 2 years
b) What tax rate will apply if sell the property after 5 years


Appreciate all help

> all your listing costs will be tax year 2016 if you had it rented by Dec 27.
> depreciation will be just one month of 2016 - december...and your tax preparer or program should tell you that.
> value for depreciation purposes is subjective. generally it behooves you to take the higher value so you can deduct more...although you'll really be giving almost all of it back when you sell. if you are in the top tax bracket, then take the zillow value because the recapture is capped at 25% and you will save some.
> if you sell after dec 2019 then, under the current system, the capital gains taxes will be at the prevailing cap gains rates - mostly 15% but capped at 20% for high earners. if you sell before then, then you pay nothing up to 250k profit, 500k if MFJ.  you will still have to recapture the depreciation from [late] 2016-2019 though.

but really, nobody knows what the tax code will do next few years. so it's all kinda up in the air.

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solarUS said:   
washin said:   I am a new landlord and need help with determining tax deductions:

A) Moved to a new Home in Nov 2016. Lived in the old home for over 7 years.
B) Made previous home available for rent in Dec 2016, used an realtor to rent agent, they charged 80% of a month's rent as commission.
C) Home was rented starting Jan 2017, contract signed Dec 22 and lease executed Dec 27.
D) Deposit and Jan 2017 Rent was paid on Dec 27th
E) Property per zillow values at $295K as of Dec 2016, County's appraisal was $242K ( 182K improvement, 60K land)

My questions.
For deduction that I take on the property for Tax year 2016:
a) Can I take realtor commission and other costs in rental preparation (carpet cleaning, lock add/changes) as deductions
b) Do i start taking depreciation in TAX year 2016, what will be cost basis , zillow being higher than county

Taxes going forward :
a) Is there an advantage in selling the property before the end of 5 years to forgo taxes on the appreciation ( 2 years
b) What tax rate will apply if sell the property after 5 years


Appreciate all help

> all your listing costs will be tax year 2016 if you had it rented by Dec 27.
> depreciation will be just one month of 2016 - december...and your tax preparer or program should tell you that.
> value for depreciation purposes is subjective. generally it behooves you to take the higher value so you can deduct more...although you'll really be giving almost all of it back when you sell. if you are in the top tax bracket, then take the zillow value because the recapture is capped at 25% and you will save some.
> if you sell after dec 2019 then, under the current system, the capital gains taxes will be at the prevailing cap gains rates - mostly 15% but capped at 20% for high earners. if you sell before then, then you pay nothing up to 250k profit, 500k if MFJ.  you will still have to recapture the depreciation from [late] 2016-2019 though.

but really, nobody knows what the tax code will do next few years. so it's all kinda up in the air.


 

  Thank you solarUS

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Anyone on here successfully fight a mechanics lien without a signed lien release? It's a matter amounting to $500.

rated:
mastroadam said:   Anyone on here successfully fight a mechanics lien without a signed lien release? It's a matter amounting to $500.
  You don't have a written estimate and proof of payment?

rated:
rufflesinc said:   
mastroadam said:   Anyone on here successfully fight a mechanics lien without a signed lien release? It's a matter amounting to $500.
  You don't have a written estimate and proof of payment?

  The invoice with his letterhead looks like chicken scratch and I paid cash, so far he is only claiming I still owe $500 not the full ~$7600 

rated:
mastroadam said:   
rufflesinc said:   
mastroadam said:   Anyone on here successfully fight a mechanics lien without a signed lien release? It's a matter amounting to $500.
  You don't have a written estimate and proof of payment?

  The invoice with his letterhead looks like chicken scratch and I paid cash, so far he is only claiming I still owe $500 not the full ~$7600 

  
Perhaps you should causally let him know you have a relative who works at IRS....is he fully accounting for all that cash??

rated:
mastroadam said:   
rufflesinc said:   
mastroadam said:   Anyone on here successfully fight a mechanics lien without a signed lien release? It's a matter amounting to $500.
  You don't have a written estimate and proof of payment?

  The invoice with his letterhead looks like chicken scratch and I paid cash, so far he is only claiming I still owe $500 not the full ~$7600 

Has the lien been properly recorded and filed? If not, it might not be an issue.
If it has been recorded, your owner's title insurance policy might offer some protection -- check with the carrier if it's been recorded.

Also, is the "contractor" properly licensed? If not, your local business regulation or licensing authority, your state corporation commission or both may be able to assist you and get some sort of stipulated judgment or consent order filed to settle the matter.

Another alternative: many localities and most courts offer mediation, arbitration or both. and these can be effective, low-cost ways to settle minor controversies.  Examples:

​Fairfax County Consumer Protection

Unlicensed Contractors

Arbitration  (just be careful, because arbitration decisions are often final, do not accommodate juries, cannot be appealed, and do not necessarily follow standard evidence and hearsay rules). 

You might be able to file a complaint with the police if there's been some financial crime or construction fraud or work not properly performed. 

In general, I always require my vendors to use my contracts -- and they all contain lien waivers as a stipulated contract term. 

rated:
vadeltachi said:   
mastroadam said:   
rufflesinc said:   
mastroadam said:   Anyone on here successfully fight a mechanics lien without a signed lien release? It's a matter amounting to $500.
  You don't have a written estimate and proof of payment?

  The invoice with his letterhead looks like chicken scratch and I paid cash, so far he is only claiming I still owe $500 not the full ~$7600 

Has the lien been properly recorded and filed? If not, it might not be an issue.
If it has been recorded, your owner's title insurance policy might offer some protection -- check with the carrier if it's been recorded.

Also, is the "contractor" properly licensed? If not, your local business regulation or licensing authority, your state corporation commission or both may be able to assist you and get some sort of stipulated judgment or consent order filed to settle the matter.

Another alternative: many localities and most courts offer mediation, arbitration or both. and these can be effective, low-cost ways to settle minor controversies.  Examples:

​Fairfax County Consumer Protection 

Unlicensed Contractors 

Arbitration  (just be careful, because arbitration decisions are often final, do not accommodate juries, cannot be appealed, and do not necessarily follow standard evidence and hearsay rules). 

You might be able to file a complaint with the police if there's been some financial crime or construction fraud or work not properly performed. 

In general, I always require my vendors to use my contracts -- and they all contain lien waivers as a stipulated contract term. 

  It has not been recorded yet so at this point it is just a threat.  Part of that $500 was supposedly for the collapse of the old abandoned septic tank, which one of my renters stepped on months later and fell 3-4 feet into a sinkhole.   Luckily they aren't going to sue me but still was a close call.  Either way the contractor told me verbally at the start of the project that if the county wanted the tank crushed he wouldn't charge me.

rated:
mastroadam said:   
vadeltachi said:   
mastroadam said:   
rufflesinc said:   
mastroadam said:   Anyone on here successfully fight a mechanics lien without a signed lien release? It's a matter amounting to $500.
  You don't have a written estimate and proof of payment?

  The invoice with his letterhead looks like chicken scratch and I paid cash, so far he is only claiming I still owe $500 not the full ~$7600 

Has the lien been properly recorded and filed? If not, it might not be an issue.
If it has been recorded, your owner's title insurance policy might offer some protection -- check with the carrier if it's been recorded.

Also, is the "contractor" properly licensed? If not, your local business regulation or licensing authority, your state corporation commission or both may be able to assist you and get some sort of stipulated judgment or consent order filed to settle the matter.

Another alternative: many localities and most courts offer mediation, arbitration or both. and these can be effective, low-cost ways to settle minor controversies.  Examples:

​Fairfax County Consumer Protection 

Unlicensed Contractors 

Arbitration  (just be careful, because arbitration decisions are often final, do not accommodate juries, cannot be appealed, and do not necessarily follow standard evidence and hearsay rules). 

You might be able to file a complaint with the police if there's been some financial crime or construction fraud or work not properly performed. 

In general, I always require my vendors to use my contracts -- and they all contain lien waivers as a stipulated contract term. 

  It has not been recorded yet so at this point it is just a threat.  Part of that $500 was supposedly for the collapse of the old abandoned septic tank, which one of my renters stepped on months later and fell 3-4 feet into a sinkhole.   Luckily they aren't going to sue me but still was a close call.  Either way the contractor told me verbally at the start of the project that if the county wanted the tank crushed he wouldn't charge me.

  
Wow...this gets more interesting...how do you know  the tenant who fell in the sink hole won't sue?  Do you have a signed statement to the fact?   We live in a very litigious world.   As soon as he is down on his luck, he could pull you down with him.

rated:
drew2money said:   
mastroadam said:   
vadeltachi said:   
mastroadam said:   
rufflesinc said:   
mastroadam said:   Anyone on here successfully fight a mechanics lien without a signed lien release? It's a matter amounting to $500.
  You don't have a written estimate and proof of payment?

  The invoice with his letterhead looks like chicken scratch and I paid cash, so far he is only claiming I still owe $500 not the full ~$7600 

Has the lien been properly recorded and filed? If not, it might not be an issue.
If it has been recorded, your owner's title insurance policy might offer some protection -- check with the carrier if it's been recorded.

Also, is the "contractor" properly licensed? If not, your local business regulation or licensing authority, your state corporation commission or both may be able to assist you and get some sort of stipulated judgment or consent order filed to settle the matter.

Another alternative: many localities and most courts offer mediation, arbitration or both. and these can be effective, low-cost ways to settle minor controversies.  Examples:

​Fairfax County Consumer Protection 

Unlicensed Contractors 

Arbitration  (just be careful, because arbitration decisions are often final, do not accommodate juries, cannot be appealed, and do not necessarily follow standard evidence and hearsay rules). 

You might be able to file a complaint with the police if there's been some financial crime or construction fraud or work not properly performed. 

In general, I always require my vendors to use my contracts -- and they all contain lien waivers as a stipulated contract term. 

  It has not been recorded yet so at this point it is just a threat.  Part of that $500 was supposedly for the collapse of the old abandoned septic tank, which one of my renters stepped on months later and fell 3-4 feet into a sinkhole.   Luckily they aren't going to sue me but still was a close call.  Either way the contractor told me verbally at the start of the project that if the county wanted the tank crushed he wouldn't charge me.

  
Wow...this gets more interesting...how do you know  the tenant who fell in the sink hole won't sue?  Do you have a signed statement to the fact?   We live in a very litigious world.   As soon as he is down on his luck, he could pull you down with him.

  I guess anything is possible, I know the people well and they are not like that.  Either way I finally saw the sinkhole in person and the complete open hole is on the adjacent neighbors property.  (the septic tank was straddling both property line for many years before I attained it.)  

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