Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 01-25-2013, 12:03 PM
Junior Member
 
Join Date: Jan 2013
Posts: 1
Partial year rental property

I have searched through other forum threads on this issue but can't find anything to piece together for my situation.

We put our home to use as a rental property effective mid-June 2012. When claiming mortgage interest and property taxes, I don't know whether to split where I claim the deduction. In other words, I don't want to double dip but want to maximize the deduction. So here's what I see as options:

1) Claim all mortgage interest and property taxes under either homeowners deductions or rental property deductions. (This seems sketchy to me, though)
2) Split the deductions across the two deduction types/forms since the home was effectively a rental for 1/2 the year.
3) Claim the mortgage interest and property taxes under both areas. (This also seems sketchy since it would be effectively double-dipping).

Thoughts?

Thanks.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 01-26-2013, 03:59 PM
Moderator
 
Join Date: Oct 2010
Posts: 5,258
“1) Claim all mortgage interest and property taxes under either homeowners deductions or rental property deductions. (This seems sketchy to me, though)”========> As said above; if the residence is rented for fewer than 15 days during 2012, then the rental income is not taxable and the mort int and r/e taxes may be allowed on Sch A line 6 / 10. If the residence is rented for 15 days or more and is used for personal purposes for not more than 14 days or 10% of the days rented, whciever is greater, then the mort int and r/e taxes MUST be allocated between the personal/rental days. In this cae, the rental exp may exceed the rental income, and the resulting loss’d be deducted against other income, subject to passive loss rules. For example, assume that r/e taxes and mort int exp were $5700 and your personal use % is 50%, let’s make it easy, and the rental portion is also 50%, then for tax purposes, $2850 needs to be reported on Sch E as long as the rental income on Sch E exceeds at least $2,850.and the other $2850 need to be reported on Sch A on line 6/ 10.As I assume that your PAL exceeds r/e tax and mort expeses.
“2) Split the deductions across the two deduction types/forms since the home was effectively a rental for 1/2 the year.”=========>Corrrect; the exp must be allocated between perosnl,1/2 of 2012 and rental days, ½ of 2012.
“3) Claim the mortgage interest and property taxes under both areas. (This also seems sketchy since it would be effectively double-dipping).”=======>As said in the example, above, unless you rented it for fewertha125 days, you need to allocate r/e tax and mort int expenses on Sch E and Sch A;so UNLESS you itemize your deductions on Sch A on your return, you can’t deduct mort int and r/e taxes on your return.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #3 (permalink)  
Old 05-23-2013, 12:47 AM
Junior Member
 
Join Date: May 2013
Location: New York,USA
Posts: 10
For example, believe that r/e taxation and Mort int exp were $5700 and your individual use % is 50%, let us create it simple, and the lease section is also 50%, then for tax reasons, $2850 needs to be revealed on Sch E provided that the lease earnings on Sch E surpasses at least $2,850.and the other $2850 need to be revealed on Sch A on the internet 6/ 10.As I believe that your PAL surpasses r/e tax and Mort expenses.

Please make visits:
conveyancing Brisbane


Last edited by Thomas Jacusy : 06-06-2013 at 06:52 AM.


Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply



Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Can Suspended Losses from Rental Property converted to Personal Residence be released upon sale of another rental property? mountainaire Rental Real-Estate 1 04-05-2011 03:59 AM
Property Rental conversion to Primary Residence and Back to Rental Property jgmeyer Rental Real-Estate 1 01-03-2011 08:47 AM
First time home buyer partial rental property bojopookie Miscellaneous 0 03-01-2009 11:33 AM
Deduction of property used in rental property mhrobinson3 Rental Real-Estate 4 01-20-2009 11:57 AM
rental property in trouble knowname Rental Real-Estate 1 12-23-2007 05:31 PM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning
 
 
 

» Recent Tax Q&A
No Threads to Display.