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Updated over 3 years ago on . Most recent reply

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David Cha
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Tax related question regarding percentage occupied

David Cha
Posted

Hi BP

just purchased my first house hack, mande tons of mistakes, but learned so much from the podcasts. I am trying organize my finances and will be speaking with a CPA but and am trying to maximize all my deductions, but I wanted to have an idea of what to expect. 

The layout is a triplex where all the units are the same size, however unit 1 has exclusive access to an unfinished basement, porch and backyard. Does this unit take a bigger portion of the percentage that is deductible, or should I still assume it is a 1/3 split, percentage wise. 

Most Popular Reply

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Kathy Henley
  • Rental Property Investor
  • St. Louis, MO
424
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741
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Kathy Henley
  • Rental Property Investor
  • St. Louis, MO
Replied

@David Cha The expenses for the WHOLE property will be entered on the Schedule E form, when filing your personal tax return. Take a look at the categories on the form and keep track of the year's expenses of each category. No need to break down the expenses by units. As owner and property manager, your internet service may be a business expense, as well as mileage reimbursements for all real estate related activities -  like driving to Home Depot for furnace filters. Keep good records, save receipts. The gas and light bill for your personal unit are not business expenses. The CPA will review the records when preparing your tax return. Ask questions - they know stuff.

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