Updated over 2 years ago on . Most recent reply
Am I on the right track
Good afternoon. This will be the first year we will be reporting REI income from 2 rentals, and I just wanted to be sure that I am reporting the information correctly. Last year we moved out of our FL condo and moved into a 3/2 that has a DADU in the rear of the home. The lease for the condo started 11/1/2022 and we collected the 1st, last and security. All of the went into a bank account designated for that property. I didn't do much to that property prior to leasing it other than painting and changed out a few receptacles, but all of that was done in 2021 so I don't think that can be claimed which is fine. Since the tenant moved in, I changed out the dishwasher for a used one for $40. The new property that has the DADU has had a tenant living there for 5 years and has a lease until 7/23. The prior owners "transferred" the last and security deposit within the closing of the property, and it is noted in the ALTA along with partial rent for 10/22. As of right now, the only thing done to that property was painting to the exterior. This property also has its own designated bank account.
My question is this to be sure I'm on the right track. All I need to provide is what I have made in rental income for each property separately of course and subtract the expenses? My expenses would be the mortgage for Nov and Dec and dishwasher for the condo and the Partial mortgage for Oct, then full Nov and Dec payments for the DADU along with the paint cost. I also pay electric, water, gas a cable for the DADU but my thoughts is that will only be a partial deduction.
To be sure I'm reporting everything correctly, do I report the security, 1st, and last month's rent collected for each unit, which I have no problem doing? Also, can all this information be sent to the tax preparer via a spreadsheet or should I be providing him with copies of the leases and the ALTA from the closing with DADU which has the information about the transfer of the security deposit and partial rent for 10/22?
I'm not sure if is or not, but is HOA payment included in the deductions?
Lastly, how is depreciation figured into the taxes this year?
Thank you for your patience with these questions.