While this is an important topic for any taxpayer selling a home, it comes up frequently in military tax situations due to relatively frequent moving. On social media many well meaning folks will give you answers to this question that are incomplete at best and sometimes outright wrong. If you’ve asked this question on social [...]
In Part A we covered a Single Member LLC. This part will be about a Multi-Member LLC (MMLLC) and this part is more complicated than Part A. Disclaimer: This discussion is incomplete. It does not cover all situations and scenarios. This article is providing information and that information is not intended to be applied to [...]
Part 4 was a list of indicators of a depreciation error. If it turns out there was one, how is it fixed? Many of us know the go to method for fixing tax filing errors. That method is to amend previous returns. It is natural to think that we know how to fix the tax [...]
A quick list of clues that might be noticed when reviewing a landlord’s tax return that might indicate a depreciation error or multiple errors. These don’t all necessarily mean that there is an error, but that there may be an error. 1. No depreciation done. 2. Depreciation basis of the rental property equals the buy [...]
Determining your depreciation deduction for your residential rental property starts with getting the depreciation basis correct. Getting basis wrong is the source of many military landlord depreciation errors. Many military landlord rentals are converted properties, converted from a primary residence to a rental. In these situations your basis will be the LOWER of either your [...]
What is depreciation? I suppose this should have been Part 1, but here we are. The people who wrote tax laws don’t usually want you to take a big tax deduction when you buy and put into service an expensive asset or when you do a big improvement on that asset. And they realize most [...]
Let's talk about depreciation of residential rental property-just residential rental property. And the building structure (often a house) in particular. If you are an active participant in the rental activity, then depreciation is allowed (***Don't stop here, deciding this doesn't apply to you because you don't want to depreciate. That is unwise). This is different [...]
I received this question on social media. I answered it and will answer here, with the standard disclaimer that you shouldn’t take this as tax advice for your particular situation, but as information on where to start getting what you need to make a determination for your particular tax situation. Know that tax laws change [...]
I hear it again and again. You should start an LLC (Limited Liability Company) for the tax benefits. You should put a rental property under an LLC for the tax benefits. Let’s talk about the tax benefits of having your rental property or business owned and operated by a Single Member LLC (SMLLC). The cost [...]
Whether you have a rental property for investment reasons or, like many military families, it's time to PCS, you need to complete and attach IRS Schedule E to your 1040. This information is based on both my personal experience investing in rental real estate and common errors I’ve seen new clients make on their tax [...]
