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Rentals Tax Blog

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Don’t Get Stiffed By The Rules of the Self Directed IRA

By Watson CPA Group (Google+)   While the traditional IRA is the path many take to fund their retirement, some people like the option of paving their own investment path. Unlike the traditional IRA that invests in stocks, bonds, and mutual funds, the self directed IRA invests in non-publicly traded business alternatives. Investments can range…

New Material Participation and Real Estate Professional Article Released

By Jason Watson (Google+)   A common question is how does active participation versus material participation work, and how do they relate to being a real estate professional. This is a good question, and we’ve written a full tax article on it (see below for the link). Here is a generalization-   For rental properties,…

Deducting Your Home Loss on Your Taxes

By Jason Watson (Google+)   The Watson CPA Group has posted a new FAQ on deducting your loss on your home sale. So, the question is- can I deduct the loss on my home sale?   Yes, but practically No. Many people are upside down on their personal residence where the mortgage exceeds the value…

Cell Phones, Tablets and Internet Tax Article Just Released

By Jason Watson (Google+)   The Watson CPA Group just released a tax article about deducting cell phone expenses, home internet expenses and purchases of cell phone, latops, iPads, etc.  You can read the full article at:   www.watsoncpagroup.com/CellPhone.pdf   Can I deduct my cell phone charges? Yes, and you have always been able to….

Tax Court Denies Rental Losses for Lack of Proof

By Jason Watson   In a proceeding brought to the Tax Court under Docket 17630-10S filed October 10, 2012, the Court denied the rental losses for lack of substantiation, and upheld the accuracy-related penalty associated with denied expenses.. The taxpayer’s father rented a property to his daughter so that she could sublet it as an…

Rental Properties and Depreciation

As mentioned in a previous blog post, a large chunk of your rental losses (and subsequent tax sheltering) can be due to depreciation.  An asset has a useful life, and while there are exceptions such as Section 179 and Bonus Depreciation with computers, machinery, etc., the IRS requires an amortization schedule where only a portion…

Rental Properties and Passive Losses

Do rental properties offer good tax sheltering?  Typically No, but Maybe So.   To be a tax shelter the investment has to lose money.  When it comes to rentals, it is easy to lose money especially if the rental income does not cover the mortgage, you have several repair bills, among other things.  These are…