I purchased a Rental house for my daughter to live in and it needed some updating can i claim these on taxes?
I do charge her rent fair market value for the area $951.00, but ive had to put around $7500.00 in repairs and improvements, $2800.00 for mortgage intrest, since purchasing the home in august 2007, her rent ive collected since then totals $4755.00, will i be able to claim all these losses ?
James Conley answers:
You will fill out a Schedule E for the property and a 4562 for Depreciation. On the E you will enter rent received, mortgage interest, property taxes, repairs, etc. Depreciation is calculated on the 4562 and carried to the Schedule E. A 4562 is needed for the FIRST year you put depreciable property into service. In years with no new items placed in service you can enter it directly on the Schedule E.
Repairs are expenses, improvements are depreciated. However, not all improvements are depreciated over 27.5 years like the house – only permanent structural improvements like roofing, plumbing, hvac ductwork, etc are. New carpeting, new appliances, furniture will be 5 years, landscaping shrubbery or fencing will be 15 years. The value of the land must be subtracted because land is never depreciated.
It can get complicated and I don’t recommend you attempt this on your own for the first time. If you want to try – first go to www.irs.gov and click forms and publications, publication number, and read Pub 527 (Residential Rental Property) and also Pub 946 (How to Depreciate Property). Also go to forms and publications, form and instruction number and read 1040 (Schedule E) instructions.
As to the losses – if you actively participate in the rental (you decide on the tenants), are charging fair market value, and are not a real estate professional you can take a loss up to $25000.
You can email me through my profile with questions.
Can I take my property management to court for negligence?
My property management placed a lockbox on my rental property to have her “maintenace” vendor go in to touch up paint & repair an area. She calls to tell me that my appliances have been stolen & the “maintenance” guy is denying anything. No forced entry. After about a week or so, she says that her vendor is willing to pay a certain amount for replacement of the appliances. Meantime, I have purchased them, & I have still lost about $600 due to her negligence. I am asking her to pay the rest. If she refuses, can I take her to court? I am from out of state & I expect her to take care of my property. Just last month, she cost me additional monies from repair issue. I also want to fire her, but her agreement shows that should I terminate services, I have to pay all remaining monthly fees until leases on the properties end. But, because of this case – negligence, can I get out of it without her charging me? Thanks for any advise.
Thanks for the response. I did not know the property management places lock boxes for when she has them repair or fix issues. It is common sense to be onsite to allow maintenance person in the home, whether it’s the tenant or property manager & give a “key to the candy store”. I had to purchase the appliances ASAP because a tenant just moved-in!
I was not aware nor signed anything about lock boxes for repairs being done to the properties WITHOUT the property management being present. Hence, why I feel her “vendor” is responsible; she said he was the only one with the code to the lock box & if doesn’t pay for all, then she is reponsible. It’s been a week & she wasn’t even going to file a police report…I had to tell her to go do it & haven’t even received copies of it! It just seems that I do a lot of work. What gets me is that she is a broker/realtor, it’s her business, & she seems clueless with her job.
Ms. V.- to answer your question..she said she received a call from the “maintenance” guy saying they were gone. She DID NOT do a walk-through with the last tenant. We went to check out the place to make sure it was left OK & it was filthy! I had to call her & she had not even been to the property! I insisted on making sure all the cleaning, carpet cleaning & fixing the wall had to be fixed & taken out of the deposit of the previous tenant. I did sign for lock box to be placed on my properties.
Correction. I did NOT sign authorization for a lock box.
James Conley answers:
I don’t know if you can charge her with negligence because you agreed to have the lock-box placed on the property. How can she be negligent, unless you can prove somehow that she knows it was the handyman and had similar problems with that person in the past.
As far as getting out of the contract without paying the penalties- you really only have to threaten her. Let her know that you are unhappy with her handling of your property and if she doesn’t let you out of the contract immediately you will report her to the real estate board and file charges due to her negligence. Then get her to release you without penalties in writing.
What does error code 105 mean on a Fisher & Pykel washer?
We are unable to locate the service manual for said washer (model GWL08). We received this error when attempting to repair this appliance and were wondering about the reason for this error. Please direct us to appropriate website or answer question.
Misspelling – washer is Fisher & PAykel :]
James Conley answers:
You might want to start first at the Appliance Guru Laundry Forum at http://applianceguru.com/forum2/ and see if they can give you the code or maybe even send you a copy of the manual. You would ned to register in order to ask a question. There is no charge to register. You can also try calling F&P customer service at 888-936-7872 and see if they can decode it.
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