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Reply to "Loss of Homestead Deduction - Rental Property"
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[quote=Anonymous]We innocently neglected to inform the DC Tax and Revenue Service that we had moved and were renting our house. Got hit with 5 years of back taxes and penalties. The penalties were far worse than the extra taxes -- the bill for 2009 was just over $1,400, mostly penalties. Our house is assessed for about half what it's "worth" on Zillow, so I doubt they bumped the assessment. That would have made the bill a lot worse. My advice: Don't forget to tell them you're moving out. The only thing worse than paying taxes to the DC government is paying penalties.[/quote]
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