Buy, rehab, rent accounting questions

[Nate Pucel]

So I'm wondering if I maybe messed up when it comes to accounting and taxes while rehabbing a house to rent.

The rehab has taken forever- 3 years. But, it's finally done. However, I'm worried that I didn't think ahead enough and structure things optimally. I bought the house in my name, in full (it was super cheap) and rehabbed it with my own money.

I didn't write off any of the expenses on my taxes and I'm worried I won't be able to write off the house or the renovation costs now that it's finished.

Looking for advice on this, as well as advice for how to structure things going forward as i have another house I'm going to renovate next.

Here are some specific questions I have outside of the problems with the first renovation.

1. If you buy a house in full, or get a mortgage with the intent of it being a rental investment, is that number tax deductible, and are the renovation costs?

2. Does it make sense to open an LLC to do this, or does it matter?

3. Is it too late to capture the tax savings from the first house, or are you able to do this by possibly having it assessed and using depreciation?

[Max Smetiouk]

Hi Nate,

You can ammend your taxes going back 3 yrs.

If it wasn't your primary residence over the last 3 years than you should be able to treat it as rental and recoup expenses. 

If you kept all necessary receipts your tax professional should be able to sort this out.

Good luck 

Max