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Updated over 8 years ago,
Possible Rental Home guidance
Hi there I recently came up on this website after trying to find answers to my biggest question, should I rent my house and buy another house or sell my house and then buy another. I am affraid of renting my house because I am not sure how I will be affected when it comes down to tax season.
My givens:
- Married
- $185k combined annual income
- Bought current house in December 2011for $302k in La Puente, Ca 91744
- 3br, 2ba, pool 1363sqft house and 6,000sqft property
- According to Redfin: Land taxable value is $137k and total house value 309k(house is worth 420k-430k at least after recent comp houses sold)
- Property taxes paid in 2014 was $3,795
- Refinanced March 2015 and Payment is now $1,637 (includes insurance and taxes) at 3.75%, 30yr loan
- Current house estimated to be around 420-430k if I sell based on recently sold houses, owe 265k on loan to date.
- Area comps show a average rent of $2,100
- Reoccurring/maintenance cost: Pool is $90, Grass/plants is $100, Utilities is $340
My questions:
- Should I just sell the home now and collect $134k......(425k sell house x 6% agent fees) - 265k (Current balance)= $134k, not sure if it will not be worth it if I sell house in 10yrs assuming house value remains about same? I ask this because if I sell now I dont pay capital gains tax but later on I will in which I do not know at what percent I will be taxed?
- Based on my givens what items can I write off during tax time?
- If I understand correctly I can depreciate (307k-137K)/27.5?
- Can I deduct both items in question 2 and 3 during tax time?
- What are the tax implications if I rent home and decide to sell on year 10?
- How would I report the income from this home, do I report all the rent I am collecting such as ($2,100x12months) or do I report Net income after all landlord cost are factored in ($2,100x12months) MINUS Reoccurring/maintenance cost?
- If I decide to get a property manager can I write this cost off?
- Can I write off a home office and travel cost if I decide to manage the property when I buy another house?