Mortgage interest & PROPERTY TXS PD YTD no longer matter? T/F?

[Joyce Jackson]

Recently filed... I have three Luxury rental properties that we’ve paid roughly 30k in interest and another 24k in taxes on... my tax guy said he didn’t need the statements because it no longer makes a difference for deductions.... does this sound right? I don’t know anything about filing taxes I’ve always used a professionals services...

[Linda Weygant]

Your tax guy is both right and wrong.

The interest and taxes etc are not deductible in 2019.  Instead, they should be capitalized and amortized along with the purchase basis and your rehab expenses.  When your property is placed into service, then the taxes, interest, etc will become deductible then.  Sounds like this date is the middle of December 2019, so they would be minimal.

But for him to say he doesn't need the statements at all tells me he is not aware that the expenses can be capitalized and depreciated.  So while you recieve the benefit from them over the course of 27.5 years, you do still receive the benefit from them.

You'll want to amend your tax return to capture these holding costs correctly.  Something tells me he probably hasn't calcuated your other basis correctly if he's missed something like this.  

Get yourself to a competent professional who understands these issues inside and out.