Any Landlords Here?

[DeathEatsaCracker]

Without getting too deep into it, let me just say that my mother is a useless psycho cat lady. Right now she's living with my grandmother (who fucking rules BTW). My grandmother is old and not in the best of health. My aunt filed a quick claim deed on my g'mother's house and it most likely will be sold and demolished upon her death.

Out of obligation, I know I'll have to buy a house for her to live in. Fortunately I can get a liveable abode for less than $20k in small town Oklahoma.

If I buy the house and rent it to her for like $1 a month are there write-offs available to offset my loss vs. the mortgage payment? I know nothing about this process and being a rental property owner so any advice would be appreciated.

 

[Mr_Mark]

 

[Mr_Mark]

I think each state has slightly different rules, but this sounds more like a tax question. You should contact a CPA to be sure

 

[bilbal]

Without getting too deep into it, let me just say that my mother is a useless psycho cat lady. Right now she's living with my grandmother (who fucking rules BTW). My grandmother is old and not in the best of health. My aunt filed a quick claim deed on my g'mother's house and it most likely will be sold and demolished upon her death.

Out of obligation, I know I'll have to buy a house for her to live in. Fortunately I can get a liveable abode for less than $20k in small town Oklahoma.

If I buy the house and rent it to her for like $1 a month are there write-offs available to offset my loss vs. the mortgage payment? I know nothing about this process and being a rental property owner so any advice would be appreciated.

If you don't plan on charging rent, see if you can purchase the home as a "2nd primary" and write off the expenses on your own Skej A. That's what I did with my bankrupt inlaws.

If your Skej E shows that you are charging $12/yr for rent and putting on a ton of write-offs, the IRS will tell you that you cannot file a Skej E because when you do file one, you're required to collect rent at a "fair rental value."

 

[Defying]

If you don't plan on charging rent, see if you can purchase the home as a "2nd primary" and write off the expenses on your own Skej A. That's what I did with my bankrupt inlaws.

If your Skej E shows that you are charging $12/yr for rent and putting on a ton of write-offs, the IRS will tell you that you cannot file a Skej E because when you do file one, you're required to collect rent at a "fair rental value."

thanks for sharing that information. seems like solid advice

 

[festeringZit]

Funny that you should ask this question, as I just redid my 2010 taxes (another long story) and discovered that I can't write off my net loss on my rental house, because I make too much.

If you make > $150K you can't write off anything. If you make > $100K the % you can write off scales down to 0 at $150K.

That is for a "passively" managed property. If you are determined to be "actively" managing the property, it's a different story.

 

[festeringZit]

<nav id="breadcrumbs">
</nav> <header id="title"> [h=1]Is Real Estate Rental Income Considered Active?[/h] <cite> by Kevin Johnston, Demand Media </cite> </header>

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<figure style="width: 300px;" id="main-article-photo" class="article-image"> <figcaption class="article-image-credits"> Your rental income qualifies as either passive or active income.
</figcaption> </figure> In business, you can earn active or passive income. Active income occurs when you perform work that brings in money. Passive income is paid to you based on something you own. A good example of passive income is rent payments from rental property you own. Passive income creates tax implications for you. However, your rental income can qualify as active if you meet the criteria set forth by the Internal Revenue Service.

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[h=2]Passive Losses[/h] When you lose money on your rental property, the IRS considers this a loss of passive income. You can only write off passive income losses against passive income gains. For example, if you made $50,000 in passive income from your rental property but incurred $10,000 of losses on that income, you would only pay tax on $40,000. If you have passive income from your rental property and only experience losses on your rental investments, you must carry over the passive losses to the next tax year to use against passive income.

[h=2]Active Participation[/h] If you actively participate in the management of your real estate holdings by making management decisions, approving new tenants, deciding upon repairs and remodeling, and generally taking an active role in the management of your rental property, you can claim that you qualify for active income deductions. You may write off up to $25,000 worth of passive losses if your adjusted gross income is no more than $100,000. Above the $100,000 ceiling, you get partial write-offs of passive income. For example, if you earn $125,000, you can write off $12,500. People who make above $150,000 do not qualify to write off passive losses against passive income.

[h=2]Real Estate Pro[/h] If you are a real estate pro, you can write off all of your losses from rental property as active income. To be considered a real estate pro, you must spend at least 750 hours a year performing personal services related to your property. This can include making management decisions, inspecting the property, overseeing repairs and interviewing tenants, to give a few examples.

[h=2]Combining Hours and Properties[/h] To meet the criteria for a real estate pro, you can combine your hours with your spouse's. In addition, you can combine all of your rental properties and total up the hours you spend actively performing personal services related to them.

 

[CHOPTALK]

<nav id="breadcrumbs">
</nav> <header id="title"> Is Real Estate Rental Income Considered Active?

<cite> by Kevin Johnston, Demand Media </cite> </header>

• Share
• RSS
• Print
• Email

<figure style="width: 300px;" id="main-article-photo" class="article-image"> <figcaption class="article-image-credits"> Your rental income qualifies as either passive or active income.
</figcaption> </figure> In business, you can earn active or passive income. Active income occurs when you perform work that brings in money. Passive income is paid to you based on something you own. A good example of passive income is rent payments from rental property you own. Passive income creates tax implications for you. However, your rental income can qualify as active if you meet the criteria set forth by the Internal Revenue Service.

Sponsored Link
15-Minute Retirement Planwww.fi.com
Download Our Free Guide For Investors with $500k+ Portfolios




Passive Losses

When you lose money on your rental property, the IRS considers this a loss of passive income. You can only write off passive income losses against passive income gains. For example, if you made $50,000 in passive income from your rental property but incurred $10,000 of losses on that income, you would only pay tax on $40,000. If you have passive income from your rental property and only experience losses on your rental investments, you must carry over the passive losses to the next tax year to use against passive income.

Active Participation

If you actively participate in the management of your real estate holdings by making management decisions, approving new tenants, deciding upon repairs and remodeling, and generally taking an active role in the management of your rental property, you can claim that you qualify for active income deductions. You may write off up to $25,000 worth of passive losses if your adjusted gross income is no more than $100,000. Above the $100,000 ceiling, you get partial write-offs of passive income. For example, if you earn $125,000, you can write off $12,500. People who make above $150,000 do not qualify to write off passive losses against passive income.

Real Estate Pro

If you are a real estate pro, you can write off all of your losses from rental property as active income. To be considered a real estate pro, you must spend at least 750 hours a year performing personal services related to your property. This can include making management decisions, inspecting the property, overseeing repairs and interviewing tenants, to give a few examples.

Combining Hours and Properties

To meet the criteria for a real estate pro, you can combine your hours with your spouse's. In addition, you can combine all of your rental properties and total up the hours you spend actively performing personal services related to them.

i counted 6001 words

 

[Bourn]

Festering zit, ur funny. Its like you can't help yourself.

 

[Bourn]

< 1% my ass...

 

[festeringZit]

I thought I was being helpful...

 

[Bourn]

lol you are. carry on

 

[Bane1976]

$20,000 for a house. Must be Bubble's shack from the TPB.

 

[DeathEatsaCracker]

If you don't plan on charging rent, see if you can purchase the home as a "2nd primary" and write off the expenses on your own Skej A. That's what I did with my bankrupt inlaws.

If your Skej E shows that you are charging $12/yr for rent and putting on a ton of write-offs, the IRS will tell you that you cannot file a Skej E because when you do file one, you're required to collect rent at a "fair rental value."

Ok, this sounds good. When you did this, how did you come out tax wise? I suspect there's no way to write off enough to make it a wash.

 

[bilbal]

Ok, this sounds good. When you did this, how did you come out tax wise? I suspect there's no way to write off enough to make it a wash.

You come out the same deduction wise for mortgage interest and taxes. You can deduct some other expenses if you use Skej E but you have to have rental income to use it. If you get a low interest mortgage on a 2nd primary and find the right house you should wind up making some profit when it comes time to sell.