They collected no rent for 2005, had it the entire year. Repairs to plumbing and moved some electrical. The received $4500 in Feb of 06. In the mean time they show expenses including depreciation of around $73,000, mostly interest. Couple sections of land and one smal rental house. What do I call it. Rent maximum on the house is $12,000 a year.
-
-
Rental or Not
Did your client have this property on the market for rent? and actually trying to rent it?
If so, then this is rental property. -
Rental?
Was this rented out in prior to all the repairs (like in 2004) and the intent of the repairs was to re-rent it? If so, Rental.Originally posted by JON
BillComment
-
rental
I agree with the other two posters. If it had been rented out previously and the repairs were made during the time that it was "available" for rent, then the expenses could all be taken. If it had not been available for rent while it was being worked on and had not been rented out previously, then the repairs can not be taken.kenComment
-
Rented briefly
It was purchased in two separate buys in 2004, adjoining sections. The same person has been in the house and paid rent for 3 of the 7 months in 2004. 2005 they could not get rent out him finally said they were going to evict and got $4000+ in Feb 2006. They only have a month to month oral lease with the guy who ignors them. Their dream, could be a nightmare, is to have the land jump in value because of a commuter train route, but that would be years before it was completed. I belief this is two sections of land. This would have to more than triple in value I think based on the costs of holding. Both are Doctors and I do not believe they will get any tax benefit even if rental. Somehow rental seems a stretch to me. If they could have collected all the rent it would have been $12,000-$14,000. They had $73,000 in expenses.Comment
-
Rental or No
Would any of the expenses be considered improvements?Comment
-
Already
capitalized the new plumbing and electrical. Orignally 3 acres at an intersection purchased for around $300,000 (all land). Then the adjacent 15 acres with an old house is purchased for $500,000, ac ouple of months later. All mortgages interest only.
Can I separate(guess) house portion of mortgage, real estate taxes and identify the direct operating for the rental. Can I then take the rest of the mortgage interest as investment interest??? What and where can I put the rest of the real estate taxes and still get a current deduction? I am avoiding electing to capitalize carrying charges.. ??? Or should I be capitalizing and WHY?Comment
Comment