Mobile Home Park Write-Offs

[Joel Hudspeth]

My wife and I purchased a park in Idaho last Jan. There are 31 park owned homes and 14 renter owned homes.  We have done quite a bit of work to the park owned homes in the tune of about 45K. This would be new roofs, furnaces, water heaters, windows, and general materials.  A friend of mine who is not a CPA says I can only write off 25K a year and the rest is carried over to the next year.  Is there a limit to how much of that I can write off per year?

[Natalie Kolodij]

Joel this will depend on a few factors. 

Whether those expenses can be deducted or need to be capitalized will depend based on what was done. 

Also though- much of a park is land improvements which qualify for 100% bonus expensing. 

However- if neither yourself or your wife can qualify for RE pro status tax wise then your CPA is correct that (assuming your income is under $100k) your passive losses from the park will be limited to $25k a year. 

That $25k begins to phase out at $100k, and if you make above $150k you can't deduct any losses. They carry forward.