Posted on March 3rd, 2021

In general, income from renting a vacation home for 15 days or longer must be reported on your tax return on Schedule E, Supplemental Income, and Loss. You should also keep in mind that the definition of a “vacation home” is not limited to a house. Apartments, condominiums, mobile homes, and boats are also considered vacation homes in the eyes of the IRS. Tax rules on rental income from second homes can be confusing, especially if you rent the home out for several months of the year and use the home yourself. Read More…

Tags: Other Income, Real Estate

Posted on September 2nd, 2020

The gig economy, also called sharing or access economy, is defined by activities where taxpayers earn income providing on-demand work, services, or goods. This type of work is often carried out via digital platforms such as an app or website. There are many types of sharing economy businesses including two of the most popular ones: ride-sharing, Uber and Lyft, for example, home rentals such as Airbnb, and TaskRabbit. Read More…

Tags: Gig Economy, Real Estate, Self-Employment

Posted on September 1st, 2020

If you own a rental property (and live there, too) you have 2 fantastic opportunities to reduce taxes on capital gains when selling a rental property.  Read More…

Tags: Real Estate, Tax Credits

Posted on August 2nd, 2020

In most cases, gains from sales are taxable. But did you know that if you sell your home, you may not have to pay taxes? Here are ten facts to keep in mind if you sell your home this year. Read More…

Tags: Real Estate, Tax Tips

Posted on January 4th, 2020

Final regulations were recently issued regarding details about investment in qualified opportunity zones (QOZ) that modified and finalized proposed regulations for QOFs and QOZ businesses that were previously issued on October 28, 2018, and May 1, 2019.

The final regulations provide additional guidance for taxpayers who are eligible to make an election to temporarily defer the inclusion in gross income of certain eligible gain. The final regulations also address the ability of such taxpayers’ eligibility to increase the basis in their qualifying investment equal to the fair market value of the investment on the date that it is sold, after holding the equity interest for at least 10 years. Read More…

Tags: Real Estate, Tax Law, Tax Tips

Posted on November 15th, 2019

Two questions:

1. Are you prepaying your 2020 rent so that you have a big 2019 tax deduction?
2. How do you identify in your accounting records the monies you put on your IRS Form 1099-MISC for the business rent payments to your landlord?

Read More…

Tags: Audit, Other Income, Real Estate

Posted on November 1st, 2019

If you own a historic building you should know about a tax credit called the rehabilitation tax credit, which offers an incentive to renovate and restore old or historic buildings. Read More…

Tags: Real Estate, Tax Credits

Posted on October 5th, 2019

A safe harbor is now available for taxpayers seeking to claim the section 199A deduction with respect to a “rental real estate enterprise.” What this means is that certain interests in rental real estate – including interests in mixed-use property – are allowed to be treated as a trade or business for purposes of the qualified business income deduction under section 199A of the Internal Revenue Code. Read More…

Tags: Deductions, Real Estate, Tax Law Changes

Posted on September 3rd, 2019

Keeping full and accurate homeowner records is vital for determining not only your home deductions but also the basis or adjusted basis of your home. These records include your purchase contract and settlement papers if you bought the property, or other objective evidence if you acquired it by gift, inheritance, or similar means. Read More…

Tags: Real Estate, Record Keeping

Posted on June 28th, 2019

The Tax Cuts and Jobs Act (TCJA) tax reform added new tax code Section 199A, which created a 20 percent tax deduction possibility for you if your rental property (a) has profits and (b) can qualify as a trade or business.¹ Read More…

Tags: Deductions, Real Estate, Tax Law Changes

Posted on June 20th, 2019

The preamble to the Section 199A final regulations contains the following new sentence:

… taxpayers should consider the appropriateness of treating a rental activity as a trade or business for purposes of section 199A where the taxpayer does not comply with the information return filing requirements under section 6041.¹

Tax code Section 6041 requires a trade or business to issue 1099s to certain vendors.²
So, the IRS is saying that you “should consider the appropriateness” of NOT giving 1099s to vendors if you are asserting that your rental property qualifies as a trade or business for the Section 199A tax deduction. Read More…

Tags: 1099, Deductions, Real Estate

Posted on March 3rd, 2019

The Tax Cuts and Jobs Act has resulted in questions from taxpayers about many tax provisions including whether interest paid on home equity loans is still deductible. The good news is that despite newly-enacted restrictions on home mortgages, taxpayers can often still deduct interest on a home equity loan, home equity line of credit (HELOC) or second mortgage, regardless of how the loan is labeled.

Tags: Deductions, Real Estate

Posted on March 1st, 2019

Rent to Win: Understanding the Income and Tax Benefits of Rental Property

Have you thought about purchasing a rental property? Great! You have the opportunity to generate additional income, save for retirement, and improve your tax posture. To unlock the full income and tax benefits of rental property, it’s critical that you do the following 5 things first:

• Meet with a financial planner. Explore how owning a rental property will fit into your current and future financial needs.
• Carefully choose the right rental property! Do your homework. Research the neighborhood. Compare monthly rental rates for nearby properties.
• Consult with a lawyer. You’ll need an airtight rental contract to reduce your liability.
• Decide if you’ll manage the property or hire a manager. Don’t miss out on the tax benefits of rental property because you’re afraid managing real estate will take up all your spare time. Many owners of apartments and homes for rent will hire a property manager.
• Meet with a CPA who has real estate and rental property experience. Real estate taxes can get complicated…fast. However, here at Robert P Russo CPA, we work with everyone from couples who own a single rental property to landlords with dozens of apartments and homes for rent. Our goal is to maximize the tax benefits of rental property for our clients. Now, let’s take a closer look at those benefits…

Read More…

Tags: Deductions, Real Estate

Posted on February 8th, 2019

Safe harbor! It sounds wonderful.

Obviously, you are going to be comfortable in a safe harbor. And if you said you don’t want comfort, you might be thought of as a little loony.

You may sense that we are not jumping with joy about this new safe harbor for Section 199A rental property. It’s true; our joy quotient is a little low on this safe harbor because of the work involved.

Our feeling is that you did this work, so your property is a trade or business with no safe harbor needed. Of course, the safe harbor gives you comfort, so we need to examine what’s involved.

With the new safe harbor, the IRS thinks it is your new friend when it comes to claiming the Section 199A 20 percent tax deduction on your rental real estate profits. Read More…

Tags: Deductions, Real Estate

Posted on January 3rd, 2019

The Tax Cuts and Jobs Act, passed in December 2017, made tax law changes that will affect virtually every business and individual in 2018 and the years ahead. One tax provision that taxpayers should be aware of is that like-kind exchanges are now generally limited to exchanges of real property. Here’s what you need to know: Read More…

Tags: Real Estate