i own a rental condo; any good ideas about how to maximize deductions?

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here, ok, does anyone take expenses for meals where you discuss business? that kind of thing?

Can't imagine in what context that would legitimately come up. Dinner with your tenant? Dinner with your realtor? Unless you own a flotilla of condos with other investors in which case you've probably set it up as an LLC or REIT anyway.

I deduct 50% of meals - but my condo is in Chicago and I am in DC, so meals are part of travelling costs. See schedule E instructions attached above, language as follows:

"You can deduct ordinary and necessary auto and travel expenses related to your rental activities, including 50% of meal expenses incurred while traveling away from home."

[Anonymous]

Anonymous wrote:I assume you are charging yourself a management fee for your time devoted to managing the property. Perfectly allowable expense. 5-6% of gross rental income won't raise eyebrows.

This is an awful idea. You add an expense and decrease rental profits, but increase ordinary income.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I assume you are charging yourself a management fee for your time devoted to managing the property. Perfectly allowable expense. 5-6% of gross rental income won't raise eyebrows.

This is an awful idea. You add an expense and decrease rental profits, but increase ordinary income.

Wouldn't you have to declare the management fee as income if you are paying yourself? Seems like it wouldn't get you anything.

[Anonymous]

Anonymous wrote:Do you have to claim the income? I haven't been claiming mine.

Do you also shoplift milk from the store? You're despicable.

[Anonymous]

Anonymous wrote:Wait so you are writing off questionable expenses and ignoring the income? Yes, that is illegal. Before, since you could conceivably claim you didn't know, it exposed you to civil liability. Now that you have been told it is illegal, you can be held criminally liable. So stop.

Yeah, you'd go to prison for that. The IRS has an 80% success rate in criminal cases.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I assume you are charging yourself a management fee for your time devoted to managing the property. Perfectly allowable expense. 5-6% of gross rental income won't raise eyebrows.

This is an awful idea. You add an expense and decrease rental profits, but increase ordinary income.

You pay your mgmt LLC and fee, and that LLC then has business (not real estate) expenses such that you effectively have no extra income. I would agree it doesn't work as well for a single-condo owner, but if done correctly it is a cash-positive, income-deductive proposition.

[Anonymous]

Anonymous wrote:Do you have to claim the income? I haven't been claiming mine.

People like you are disgusting. You are stealing from the government and from all the people who try to play by the rules. I hope you go to jail for tax fraud.

As for deductions- be very familiar with Section 469- there are strict limitations as to when you can take these types of deductions against your ordinary income. The general rule is that rental activities are passive, and rental expenses can only be deducted against rental income, NOT ordinary income.

[Anonymous]

Anonymous wrote:depreciation
cleaning fees
cost for advertising
vehicle gas and maintenance driving to and from unit
condo fees
taxes
insurance
mortgage

You can only deduct mortgage interest, not the payment of the principal.

[Anonymous]

Anonymous wrote:Do you have to claim the income? I haven't been claiming mine.

Lol, please don't let the IRS catch you. Of course you have to claim the income. Do you want to sit in jail for tax fraud?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Do you have to claim the income? I haven't been claiming mine.

Lol, please don't let the IRS catch you. Of course you have to claim the income. Do you want to sit in jail for tax fraud?

How will the IRS find out that the unit is rented? I can own it just to own it. I don't deduct expenses, etc. but deduct property tax and mortgage interest.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Do you have to claim the income? I haven't been claiming mine.

Lol, please don't let the IRS catch you. Of course you have to claim the income. Do you want to sit in jail for tax fraud?

How will the IRS find out that the unit is rented? I can own it just to own it. I don't deduct expenses, etc. but deduct property tax and mortgage interest.

It is an easy paper trail for them to audit. If renters write you a check and you cash it, wouldn't it be obvious that the unit is rented?

[Anonymous]

Unless you make $100k or less, you can't deduct more than you claim in rental income anyway. So, there is no point in trying to generate a rental kids.

[Anonymous]

Cost segregation study and accelerate depreciation accordingly

[Anonymous]

Anonymous wrote:

Anonymous wrote:depreciation
cleaning fees
cost for advertising
vehicle gas and maintenance driving to and from unit
condo fees
taxes
insurance
mortgage

You can only deduct mortgage interest, not the payment of the principal.

Yep, you cannot deduct principal portion of the mortgage. Also, when you sell, you have to subtract depreciation from the cost basis... another words, you pay the taxes on the depreciation at the time of sale.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Do you have to claim the income? I haven't been claiming mine.

Do you also shoplift milk from the store? You're despicable.

To be fair the store that is selling the milk stole it from you to begin with.