Forgive me if this is in the wrong forum, but I have some tax deduction questions…
I have a rent house that I am paying the required POA and Country Club dues. Is that deductible? Is any portion of the mortgage/insurance/taxes on that property deductible? I am already accounting for every mile I spend driving to the property and every trip to Home Depot, but are there other deductions that people normally overlook? The property is in Texas.
Thanks.
I am in Houston also but I am not a tax professional. But you are a Realtor so as a real estate professional and that means that all your income is ordinary income and tax deductable.
I am assuming that you are referring to a property you own that you rent to tenants (as opposed to you being the tenant, leasing your residence).
Mortgage principal is never deductible.
Interest, taxes, HOA, required club dues, repairs, etc are deducted on Sch E. You may also take deductions for other expenses related to the rental of the property: mileage, postage, office supplies, management fees, lawn maint, etc. Don’t forget depreciation.
It does not matter that you are a real estate professional. Rent income and expenses for the rental property should be reported on Sch E, and NOT combined with your other real estate activities on Sch C.
The only effect of being classified a “real estate professional” is that it removes the $25,000 real estate loss limit.
McWagoner,
Just curious–the $25,000 real estate loss limit which is removed for real estate professionals–I’m assuming that the real estate professional could then carry forth a much larger loss? To the next tax year?
Furnishedowner
Normally, real estate losses are limited to $25k (there are other passive loss limits in play, too). Excess losses are carried forward to future years.
A real estate professional has no $25k loss limit (real estate losses are unlimited in the current year). The other passive loss limits are unchanged.
mcwagner,
Thanks for the info. I 'm not planning on loss, but just in case…
Furnishedowner