Allowable itemized deductions lower than what your rehab cost?

[Rik Hunter]

Just got my tax return back from the CPA. It's my first time using one, and since I'm no tax expert, I was shocked to see that I owe taxes and that my wife and I only got the standard deduction because the "Allowable itemized deductions" only amounted to $10,906. 

How is this possible when I have $24,300 in rehab costs alone? How is the $10,906 calculated? 

(Sure, I'm getting higher rents now, and the ROI will pay off eventually, but I would have the same tax situation if I had done no rehab at all.)

[Ashish Acharya]

Originally posted by @Rik Hunter:

Just got my tax return back from the CPA. It's my first time using one, and since I'm no tax expert, I was shocked to see that I owe taxes and that my wife and I only got the standard deduction because the "Allowable itemized deductions" only amounted to $10,906. 

How is this possible when I have $24,300 in rehab costs alone? How is the $10,906 calculated? 

(Sure, I'm getting higher rents now, and the ROI will pay off eventually, but I would have the same tax situation if I had done no rehab at all.)

You are looking at the wrong place. The standard deduction and itemized deduction related to personal taxes. If you look at your Schedule E, your rental activities' income and expenses are itemized there. Dont expect to see full rehab cost in the Sch E as well because I am sure most of it has to be itemized, if reported correctly.