no real rental advantage

[Possi]

I have a client who lives in Bulgaria and has rental property in VA.

They were new last year, and I prepared the tax return as usual.

With all the wages on the 2555, there is no taxable income. Of course, the rental is a loss, but there is no advantage.

I'm just throwing this out there. Usually when I have these thoughts, I put them here and someone corrects whatever I'm doing wrong!

[BHoffman]

You might want to think about when they sell the property. I would report it even if it isn't allowed in the current year.

[taxea]

BH is right. This would be an informational return to report the depreciation and loss on a yearly basis. There will come a time that this house is reverted to personal use or sold or makes a profit and the records will be there. Just be sure to tell your client not to dispose of any of the tax returns during the period that this house is under their ownership.

[S T]

Report all

Possi, remember

complete a materially complete and accurate tax return based on the information provided to you by the tax client, and then also to go one step further and ask all of the proper due diligence questions regarding income, expneses, ownership, etc. (we all know you do)

Based on the above, I would report on the return regardless of the the income tax outcome, and then also, since there was no income tax benefit from any losses, is there anything that might carryover on to 8582, etc????

Remember those carryover forms and elections. I have found so many times, that I was thankful for protecting some of the carryover's, just by reporting or filing a tax return.

Sandy

[Possi]

Of course...

Possi, remember

complete a materially complete and accurate tax return based on the information provided to you by the tax client, and then also to go one step further and ask all of the proper due diligence questions regarding income, expneses, ownership, etc. (we all know you do)

Based on the above, I would report on the return regardless of the the income tax outcome, and then also, since there was no income tax benefit from any losses, is there anything that might carryover on to 8582, etc????

Remember those carryover forms and elections. I have found so many times, that I was thankful for protecting some of the carryover's, just by reporting or filing a tax return.

Sandy

... Of course I report it all... it's the only way to make a living! hahaha

You hit it on the head, but I thought it was a stupid question to ask. Now I'm going to ask it anyway... Why isn't anything carrying over? I'm not getting any carryover losses at all. Seems that they might be able to take advantage of the losses when (some day) they come back to the US and have income here. Especially since the depreciation will count against them when and if they ever sell it. OH CRAP! I had "active participation" checked! Living in Bolgaria and having a management company probably means there was not active participation. THAT will carry if forward! duh
Should I go back and amend last year's return to carry that forward, too?

btw, the plan is to move back here in a few years and live in the house.