Sharon asks:
Hi Gina,
Ran across your website researching tax tips for rental property on the web.
I was hoping you could help me with some tax advice.
I bought a new home in December of 2008 and instead of selling my old home which I bought in May 2007, I decided to turn it into rental property (because of the poor real estate market). So I turned my "old" home into rental property in December of 2008. I did not actually have a renter until February 2009. However, I made several repairs and upgrades since December 2008.
When I'm filing my taxes, I'm only claiming 11 months of mortage interest, property taxes on the "old home". What do I do with that 1 month of mortgage interest and property taxes on the rental property? Additionally, I also do not have any rental income in 2008.
Any help would be appreciated. Would love to know what deductions I'm missing.
Ran across your website researching tax tips for rental property on the web.
I was hoping you could help me with some tax advice.
I bought a new home in December of 2008 and instead of selling my old home which I bought in May 2007, I decided to turn it into rental property (because of the poor real estate market). So I turned my "old" home into rental property in December of 2008. I did not actually have a renter until February 2009. However, I made several repairs and upgrades since December 2008.
When I'm filing my taxes, I'm only claiming 11 months of mortage interest, property taxes on the "old home". What do I do with that 1 month of mortgage interest and property taxes on the rental property? Additionally, I also do not have any rental income in 2008.
Any help would be appreciated. Would love to know what deductions I'm missing.
My reply:
Hi Sharon, thanks for reading.
You are allowed to claim rental expenses once your home is ready to accept a renter. If your rental home was ready to accept a renter in December 2008, then your repairs, property taxes and mortgage interest for the month of December (and depreciation) would be deductible as rental expenses on Schedule E of Form 1040. If however your home was not ready to accept a renter, you didn't try to get a renter in there in December, etc. then those expenses would not be deductible.
Best wishes,
Gina
http://GLGcpa.com
You are allowed to claim rental expenses once your home is ready to accept a renter. If your rental home was ready to accept a renter in December 2008, then your repairs, property taxes and mortgage interest for the month of December (and depreciation) would be deductible as rental expenses on Schedule E of Form 1040. If however your home was not ready to accept a renter, you didn't try to get a renter in there in December, etc. then those expenses would not be deductible.
Best wishes,
Gina
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