All Forum Posts by: Uwe K.

Just a thought: Since the powerline is in the danger zone, you could call the power company and see if they want to do some preventative maintenance.
Maybe they'd rather cut a tree down (they already have the equipment) than risking some electrocuted squirrels and having to do emergency work. But they may also say "your problem".

Sure, the 2 sqft are negligible, but I was not thinking of deducting the 2 sqft home office use (due to more hassle than savings), but rather using it to have the qualifying home office and therefore able to make my home the principal place of business (PPB, to throw in some acronyms).
Because it seems the home office is one requirement for a PPB. No home office, no PPB. And the PPB is a requirement to take the mileage deduction for any rental-related transportation to and from my house. So no home office, no mileage deduction (to/from home).

Because I currently don't want to dedicate a whole desk or computer or even room to the home office, the idea was that the dedicated file cabinet might pass, and then I get the savings from the mileage deduction.

The planning Charles mentioned would help, but really only a little, so that I would still be frustrated about most mileage not being deductible with these crazy rules.

Steve, that's where the issue is:
Yes, I have an office. And my desk is in there and my computer on the desk. But as soon as I answer a private email from the computer, it's not a qualifying home office anymore. However, it's still an office at the address of my business.
Would it then be the "principal place of business".

Actually, just reading through the publications again: T

IRS pub 587: page 3, Principal Place of Business states:

"Your home office will qualify as your principal place of
business if you meet the following requirements.
- You use it exclusively and regularly for administra-
tive or management activities of your trade or busi-
ness.
- You have no other fixed location where you conduct
substantial administrative or management activities
of your trade or business."

The second requirement is easy to meet for most , but the first one then is the same as for a home office, if I read it right. Basically, you can't have the principal place of business without a qualifying home office. Is that how you CPAs get to your conclusion?

Then a follow-up question comes to mind:
A qualifying home office, with the regular and exclusive requirements: Nowhere does it state that I have to have a desk pens in that "office area". We also know it doesn't have to be a complete room.
So as an extreme case, couldn't I have a filing cabinet, dedicate the 2 sqft exclusively to the rental business, because all I store in there (and on top) is rental related stuff. So I have a 2 sqft home office and a principal place of business?

Nobody can realistically expect that ALL my administrative and management activities have to happen in the home office area.

I was reading about and researching this over and over again, books, IRS pubs, here, elsewhere. I cannot get a conclusive answer even in forums with seasoned CPAs debating this topic.

That much is clear:
- If you have a qualifying home office, you can deduct the related expenses
- If you run errands for maintaining etc. you rental property, you can deduct the mileage.
- You cannot deduct commutes, e.g with No home office, the way from and to your home would be the commute, anything in between is deductible (in simple terms)
- If you have a qualifying home office, you may or may not have the principal place of business in your home (e.g. home office, but you rent another office space)

Here is where I am not clear:
Can I have the principal place of business in my home although I do not have a qualifying home office (or alternatively may have one, but do not claim it)? I have no other office space, just a PO box that's too small to fit a desk. Do they accept that? That's what even CPAs debate.

The answer to this question then influences my main concern: mileage deduction.
If I have to drive to a rental for some maintenance (no other stops to keep it simple), can I deduct the mileage, if I have an office in my home, but not an "IRS type qualifying home office", that I actually use for business purposes?
Or back to the previous question: can i have the principal place of business in my home without having a "home office", but having an office in my home. (I am wording it this way because IRS pubs word it this way, on no monkey knows what they actually mean).

I also remember a few years back I may have read something about that if you expect to go to a place for a year or more regularly, it will be considered your workplace, so the drive will be a commute, no matter what. Well, in many cases, that pretty much fits any rental if you manage it yourself.
But I can't find this anymore.

What do you do? Has your "system" survived an audit?

All this assumes you work out of your home, are not an employee, and all the other little requirements they have.

Thanks guys. I keep that strategy in mind once I come across a hard to rent place :)

John: In WI, for example, there is no limit on the deposit you are allowed to charge. I know a guy holding some exclusive SFH he's is renting to (visiting) execs from large local companies, and he is charging 4 months with no issues.

Ok, it's settled then, I put on more deadbolts to keep them out. Was my gut feel anyway, especially since it has been fixed up just half a year ago (less any new tenant waste and neglect in the meantime, of course...)

Agree with the point that it might make sense to let them in if it's run down inside. In fact, that particular property was assessed about seven times the purchase price when we bought it. Similar story with other properties. Pain in the behind...

Ed, good idea with the appeals pro, didn't know they exist. I was reading about our process here already, and it somehow seems the cart is in front of the horse here: They send you a reassessment in spring, but you don't get the bill until December. They say in Dec. it's too late, but you are not always getting a reassessment, only every few years. otherwise, they just secretly increase it city wide (or 'hood wide, whatever) by an arbitrary, I meant a scientifically derived factor based on historical experience.

Gas and electric is always in my tenants names. Like Jon, it switches over to me once they cancel. If it is, however, disconnected due to non-payment, it will just be disconnected with usually no notice to me.
My lease states that tenants have 3 days to switch over. I usually remind them, and ask about every day until it's done. So far no problems. I've also sometimes put in the change order myself by notifying the utility company online of the new responsible party.

Water, like for others, is a different story. Unpaid water bills go on the tax bill, unpaid tax bills end up in foreclosure. For my duplexes, I pay water (incl. garbage) and it's included in the rent. That's common here and expected. Some landlords split up the water bill 50/50 for a duplex.

Single family, except one special case where I included it in the rent, the tenant gets billed by me every quarter and I pay directly. Sometimes a headache, but I know those people would also not pay directly anyway. In a single family case, there is no argument who used the water, only one tenant.

Actually not sure if I am in the best category here:

Got a letter from the city yesterday about one of my duplexes. They offer me the opportunity (I feel so special) to make an appointment for interior inspection for assessment purposes, claiming, of course, if gives a fairer assessment than if he would judge only by the outside.

My properties got re-assessed multiple times over the years, and so far I only got the re-assessment notice. Bam, take it or leave it. Never this "one-time opportunity to call within 10 days".

Wondering now if I should let him on or ignore him. Would it help or hurt to keep the assessment and thus the property taxes down?

This occupied my mind all day yesterday:
Probably every major city has some kind of free weekly magazines, full of ads, masked as a TV program, and targeted at the African American community, often lower income range. Here, they are called "The Blue Book" and "The Red Book".
Besides about 50% of the ads promoting some kind of hair-related service, there are some rental ads in there, too, and quite a handful show in big bold letters "EVICTIONS OK".

I was wondering why landlords would target this group of people specifically. Anybody knows (or maybe does it)?

Do they take a higher deposit, evict at the first opportunity and still come out on top?
Do they charge exorbitant rents and gamble that it will offset and future losses?
Are they total junk properties? But evicted tenants are the first to call the city inspector, so can't see how that strategy works.
Hard to rent places where no normal person would go to?

I've used erentpayment before, as well. Costs $3 per transaction, I think. There are other sites, too, with different prices (and some min. requirements).
You could always give them the standard option of mailing a check etc., if that's acceptable to you.

Regarding your "stopping eviction" concern. Depends on the state law. In WI, until recently, if you filed for an eviction and accept money after that from the tenant, a judge may see it as a renewed lease agreement or a new lease agreement (offer and acceptance).
Tenant with access to your bank account could then "force" the acceptance of the payment on you.

A few months back they changed the statutes so that rent acceptance after filing does specifically not affect the eviction proceedings anymore.