Excess Depreciation Claimed - Now What? Justin Fundalinski of Jim Saulnier & Associates, who I met while volunteering time for the betterment of the Financial Planning Association, asked me a procedural question about a fascinating situation he encountered regarding depreciation and disposition of residential rental real...
How to Calculate Basis of a Primary Residence Converted to Rental Property [Reg. §1.168(i)-4(b)] [Reg. §1.165-9(b)(2)] can be a nuanced and complicated question to answer as it depends on a handful of specific facts and circumstances. Many people have built impressive residential real estate portfolios...
Generally co-ownership in rental property does not require the formation of a partnership when the following conditions are met. 1. Each co-owner must hold title to the property as a tenant in common (TIC) under local law. This usually doesn't apply community property. Although the title to the property...
Should A Husband & Wife Form an LLC to Invest In Real Estate? Literally the $1,000,000 question. A husband and wife formed a Limited Liability Corporation (LLC) that invests in rental real estate to protect themselves in event of a lawsuit. They want to know if...
If you rent a house or condominium to someone for less than 30 days in Colorado it is likely sales tax is owed on that rental. There may also be other taxes owed as well including line items for a county lodging tax etc. If you...
According to Tax Court Memo 2010-261, a husband and wife purchased real estate, refurbished it and reported the sale on Form 4797. They contended the homes were purchased for use as rentals; however, over the three-year period at issue, none of the homes were rented. The IRS determined that...
The Small Business Jobs Act of 2010 is amazingly complex legislation. Some pundits estimate that the provisions offering tax relief will actually 'cost' up to $12 billion. These tax cutting measures were I believe intended to offer incentive to businesses to make investments in plant, property, more...
In reviewing James F. Moss, et ux. v. Commissioner 135 TC No. 18 to be a real estate professional, a taxpayer must meet two requirements: (1) More than one-half of the taxpayer’s personal services must be performed in real property trades or businesses in which he materially participates; and (2) The taxpayer must perform...
Rental income is any payment you receive for the use of or occupation of property. Expenses of renting property can be deducted from your gross rental income. You generally deduct your rental expenses in the year you pay them. Publication 527, Residential Rental Property, includes information...
Unless of course you are married and filing a joint tax return, whereby the IRS essentially classifies both individuals together as a single tax payer, you should take care to allocate costs equitably for items of shared ownership. In US Tax Court Summary Opinion 2010-15 (Sword...