Every Landlord's Tax Deduction Guide

by Fishman, Stephen

• ISBN13: 9781413304213
• ISBN10: 1413304214
• Edition: 2nd
• Format: Paperback
• Copyright: 2005-11-30
• Publisher: Nolo

Summary

Every Landlord's Tax Deduction Guide gives small residential landlords who can't afford to hire high-priced accounting or law firms the guide they need to save money on taxes. Every Landlord's Tax Deduction Guide explains how to: fill out the dreaded IRS Schedule E determine whether an expense is a deductible repair or depreciable improvement take real estate tax credits maximize depreciation deductions deduct losses arising from real estate ownership keep proper tax records deduct home office, travel, and entertainment expenses This book is comprehensive yet easy to read, and provides many interesting and relevant examples. It also covers other deductions landlords can take, including taxes, interest, casualty losses, expenses for professional services and much more.

Table of Contents

Introduction
Why You Need to Know About Tax Deductions	2	(1)
The Ever-Changing Tax Laws	3	(1)
Icons Used in This Book	4
Tax Deduction Basics for Landlords
How Landlords Are Taxed	2	(2)
How Income Tax Deductions Work	4	(6)
How Property Ownership Affects Taxes	10	(8)
The IRS and the Landlord	18
Landlord Tax Classifications
The Landlord Tax Categories	2	(1)
Business Owner Versus Investor	2	(5)
Are You Profit Motivated?	7	(9)
Real Estate Dealers	16
Deducting Your Operating Expenses
Requirements for Deducting Operating Expenses	2	(6)
Operating Expenses That Are Not Deductible	8
Repairs
Repair Versus Improvement	2	(10)
The General Plan of Improvement Rule: A Trap for the Unwary	12	(3)
How to Deduct Repairs	15	(3)
Tips for Maximizing Your Repair Deductions	18
Depreciation Basics
Depreciation: The Landlord's Best Tax Break	3	(1)
Understanding the Basics	4	(7)
How to Depreciate Buildings	11	(12)
Depreciating Land Improvements	23	(2)
Depreciating Personal Property	25	(16)
When You Sell Your Property	41	(4)
Tax Reporting and Record Keeping for Depreciation	45
Maximizing Your Depreciation Deductions
Determining the Value of Your Land and Buildings	2	(10)
Segmented Depreciation	12
Interest
Interest Landlords Can (and Can't) Deduct	3	(1)
Mortgage Interest	4	(3)
Other Interest Expenses	7	(1)
Points and Prepaid Interest	8	(1)
Interest on Construction Loans	9	(1)
Loans With Low or No Interest	10	(1)
Loans on Rental Property Used for Nonrental Purposes	11	(1)
Keeping Track of Borrowed Money	12
Start-Up Expenses
What Are Start-Up Expenses?	2	(2)
Determining Your Business Start Date	4	(3)
Avoiding the Start-Up Rule's Bite	7	(1)
How to Deduct Start-Up Expenses	8	(5)
If Your Business Doesn't Last 15 Years	13	(1)
If Your Business Never Begins	13
The Home Office Deduction
Qualifying for the Home Office Deduction	2	(7)
Calculating the Home Office Deduction	9	(10)
IRS Reporting Requirements	19	(1)
Audit-Proofing Your Home Office Deduction	20	(2)
Deducting an Outside Office	22
Car and Local Transportation Expenses
Deductible Local Transportation Expenses	2	(4)
The Standard Mileage Rate	6	(2)
The Actual Expense Method	8	(12)
Other Local Transportation Expenses	20	(1)
Reporting Transportation Expenses on Your Tax Return	20
Travel Expenses
What Are Travel Expenses?	2	(4)
Deductible Travel Expenses	6	(2)
How Much You Can Deduct	8	(10)
Maximizing Your Travel Deductions	18
Hiring Help
Deducting Payments to Workers	3	(2)
Employees Versus Independent Contractors	5	(6)
Tax Rules When Hiring Independent Contractors	11	(7)
Tax Rules for Employees	18	(4)
Hiring Your Family	22	(6)
Hiring a Resident Manager	28
Casualty and Theft Losses
What Is a Casualty?	2	(2)
Calculating a Casualty Loss Deduction	4	(5)
Disaster Area Losses	9	(1)
Casualty Gains	10	(1)
Tax Reporting and Record Keeping for Casualty Losses	11
Additional Deductions
Dues and Subscriptions	3	(1)
Education Expenses	3	(2)
Gifts	5	(1)
Insurance for Your Rental Activity	5	(2)
Legal and Professional Services	7	(1)
Meals and Entertainment	8	(2)
Taxes	10	(1)
Unpaid Rent	11
Vacation Homes
The Vacation Home Tax Morass	2	(1)
Regular Rental Property	3	(1)
Tax-Free Vacation Home	3	(2)
Vacation Home Used as Rental Property	5	(3)
Vacation Home Used as Residence	8	(4)
Calculating Personal and Rental Use	12	(4)
Converting Your Home to a Rental Property	16
Deducting Rental Losses
What Are Rental Losses?	3	(1)
Overview of the Passive Loss Rules	4	(3)
The $25,000 Offset	7	(6)
The Real Estate Professional Exemption	13	(17)
Rental Activities Not Subject to PAL Real Property Rental Rules	30	(1)
Vacation Homes	31	(1)
Deducting Suspended Passive Losses	32	(3)
Tax Reporting for Passive Rental Losses	35	(1)
Strategies for Dealing With the Passive Loss Rules	36	(1)
At-Risk Rules	37	(2)
How to Deduct Rental Losses	39
Record Keeping and Accounting
Record Keeping Made Simple	2	(27)
Accounting Methods	29	(4)
Tax Years	33
All About Schedule E
Who Must File Schedule E?	2	(2)
Filling Out Schedule E	4	(5)
Schedule E Example	9
Claiming Tax Deductions for Prior Years
Reasons for Amending Your Tax Return	2	(2)
Time Limits for Filing Amended Returns	4	(3)
How to Amend Your Return	7	(1)
How the IRS Processes Refund Claims	8
Help Beyond This Book
Secondary Sources of Tax Information	2	(5)
The Tax Law	7	(6)
Consulting a Tax Professional	13	(1)
Index	1