House question
Jan. 10th, 2008 01:58 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
mermaidblueHas anyone in my fl ever rented out a property or do any of you have other experience about renting and tax returns.
We still have not managed to sell the old house. The mortgage payment is about $1000/month and we can only keep it up for so long. There has not been a single offer on the house yet. In addition we're still paying home insurance, etc on it. Our realtor believes that it probably will not sell at least until after the elections in November *sigh*. So we have 3 options that I can think of right now:
1) Let the bank foreclose and be glad to be out of it. This will mess up J's credit but not mine.
2)Leave it on the market and hope like heck it sells. This costs us the mortgage , but leaves our credit unaffected.
3) Try and rent it out for at least the mortgage payment amount, which could or could not include a lease/purchase agreement. This would get us out of the mortgage payment, but would cost us A) a small management fee B) more than likely the cost of replacing the carpet C)taxes on the rental income, which from what I can figure out would be the rent coming in minus the mortgage interest and the management fee.
What do y'all think? Anyone have any experience in this area?
We still have not managed to sell the old house. The mortgage payment is about $1000/month and we can only keep it up for so long. There has not been a single offer on the house yet. In addition we're still paying home insurance, etc on it. Our realtor believes that it probably will not sell at least until after the elections in November *sigh*. So we have 3 options that I can think of right now:
1) Let the bank foreclose and be glad to be out of it. This will mess up J's credit but not mine.
2)Leave it on the market and hope like heck it sells. This costs us the mortgage , but leaves our credit unaffected.
3) Try and rent it out for at least the mortgage payment amount, which could or could not include a lease/purchase agreement. This would get us out of the mortgage payment, but would cost us A) a small management fee B) more than likely the cost of replacing the carpet C)taxes on the rental income, which from what I can figure out would be the rent coming in minus the mortgage interest and the management fee.
What do y'all think? Anyone have any experience in this area?
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Renting may be the way to go....
Date: 2008-01-11 12:28 am (UTC)Landlords can deduct the ordinary and necessary expenses for managing, conserving, and maintaining their rental property. Ordinary expenses are those that are common and generally accepted in the business. Necessary expenses are those that are deemed appropriate, such as interest, taxes, advertising, maintenance, utilities and insurance.
Other deductible expenses may include:
* Expenses incurred from the time a property is made available for rent and is actually rented. (I wonder if this would include mortgage you pay during that time? It would *certainly* include the carpet.)
* Some or all of the original investment in the rental property may be recovered through depreciation using Form 4562, Depreciation and Amortization. Subsequent improvements may also be depreciated.
* The cost of repairs may also be deductible. This may include the cost of labor and materials. However, landlords cannot deduct the value of their own labor.
I would STRONGLY encourage you to pay a flat fee and consult a tax person to determine the best course of action here.
Re: Renting may be the way to go....
Date: 2008-01-11 12:35 am (UTC)Lots o'links.