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Tax write-offs on a rented-out condo
Dear Dollar Diva,
I just bought a condo in Florida and will be using the on-site rental
agent to rent it out during the year. What can I write off
for tax purposes?
Suzanne
Dear Suzanne,
The IRS says you can deduct all "ordinary" and "necessary"
expenses related to the condo. That includes insurance, interest,
taxes, commissions to your rental agent, professional fees, repairs
and maintenance, utilities, depreciation and any other expenses
you incur as a landlord.
At tax time, report the income and expenses related
to the condo on "Form
1040, Schedule E, Supplemental Income and Loss." Download
the Schedule E now, and use the expense categories listed on the
form as a guide to setting up your record-keeping system.
The tax rules governing landlords can be very complicated,
especially when the rental activities result in losses. For a heads-up
on the issues you will have to deal with at tax time, read "IRS
Publication 527, Residential Rental Property (including rental
of vacation homes)."
The Diva recommends you use a tax professional to
help you prepare your tax return this year. That way, you'll get
all the deductions you're entitled to, and you won't have to worry
about inadvertently stepping on a land mine. And you can deduct
the tax professional's fees related to the condo rental on Schedule
E.
-- Posted: Aug. 6, 2001
 DOROTHY
ROSEN has a master's degree in finance, with a specialization in
accounting, from the Kellogg Graduate School at Northwestern University
in Evanston, Ill. Rosen has more than 15 years of experience in
the financial arena, serving in Illinois and Florida as a certified
public accountant, financial consultant, expert witness and educator.
She is owner of Dorothy Rosen, CPA, a public accounting firm that
serves individuals and small businesses.
-- Posted: Aug. 6, 2001 |
