Partners purchase land that has an old building on it. The primary purpose for the investment was originally the chance that they build a clinic on it. 2004 they got rent from the house, but in 2005 they got 0 rent. They have substantial interest expense and some real estate taxes. In 2006 the house is rented again. The rent will never cover the costs of carrying the land and building. The land is a lot more valuable than the house. How should expenses for 2005 be recorded?????? They have decided the chances of the clinic are not great at this point, because they hope the property will become valuable from a metro rail line that may happen.
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Last edited by JON; 03-06-2006, 07:47 PM. -
Was the building available for renting. If it was then all expenses can be claimed with no rental income.Everybody should pay his income tax with a smile. I tried it, but they wanted cash -
Was available
It was available, but rent is minor.Comment
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Do the Sch E with no income and take all the expenses.Everybody should pay his income tax with a smile. I tried it, but they wanted cashComment
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Depending on how large the land is, I would consider to prorate mortgage and taxes.
Did renters use all of the land, or does rental contract state a limited use for house and some of the land?Comment
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Used a
small portion of the land....Comment
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