All Forum Posts by: Andy Bondhus

Texas code Sec. 92.010 says:  the maximum number of adults that a landlord may allow to occupy a dwelling is three times the number of bedrooms in the dwelling.  So that would be 9 adults for a 3 bedroom unit.  If I were to only allow 2 occupants per bedroom, that isn't violating any Fair Housing Laws, is it?  

Also, what if I wanted to say of the 6 occupants, only 2 could be adults, so let's say 2 parents and 4 kids?  Would that get me in trouble for discrimination?

We only have one checking account for rent and one savings account for security deposits, but of course we keep each property separate in our Quicken accounts.  We only have 3 units at this time, but I can see where the more units you get the harder it would be to keep track of getting the right money into the right accounts!

@Ashish Acharya,  I am aware that we have to deduct the land from the building basis, I was just trying to simplify my question. :-)  I appreciate your advice & quick response!

@Nicholas Aiola We do our own taxes with software and when I'm thinking through how I would put the information in, it asks for:  service date, cost basis, length of time.  I'm thinking if I put 300,000 as the basis then the program will transfer 100% of the depreciation to the schedule E.  I don't recall anywhere that it will let me only transfer 50% of it?

@Nicholas Aiola

In a couple of months, my wife and I will be closing on a duplex we plan to house hack. I understand that we can only claim 50% of the deductions while we're house hacking. My question is how to handle the depreciation for the duplex? We'll be living in the duplex definitely for the required one year, but it could be longer. So for the first year that we'll be claiming depreciation do we only claim half of the duplex's basis? So let's say the basis for the whole duplex is $300,000, do we only claim $150,000? That part seems to be logical to me, assuming we claim the $150,000.

What I'm really wondering is how we handle the depreciation once we move out and rent the other side. I was thinking while we're still house hacking and only have half the property rented that I would list the property address on the Schedule E as 123 Main St #A (the rented side) and then claim 50% of any expenses and 100% of the depreciation for the building with the starting basis of $150,000 (since the whole building basis is $300,000). But once we stop house hacking, do we add the other half of the duplex onto schedule E as 123 Main St #B and then start claiming the other half of the depreciation as of the date it's put in service or is there something else that needs to be done to list the duplex as one whole unit again or going forward will we have 2 separate entries for the duplex on our schedule E and Form 4562 since the 'date acquired for service' are different dates? Would adding the other half of the duplex for depreciation, after house hacking, be like adding it as if we'd had building improvements made that particular year?

I hope this makes sense as it's being read? Maybe I'm just overthinking how the depreciation will be handled after house hacking? Any thoughts on the subject would be appreciated!

In a couple of months, my wife and I will be closing on a duplex we plan to house hack.  I understand that we can only claim 50% of the deductions while we're house hacking.  My question is how to handle the depreciation for the duplex?  We'll be living in the duplex definitely for the required one year, but it could be longer.  So for the first year that we'll be claiming depreciation do we only claim half of the duplex's basis?  So let's say the basis for the whole duplex is $300,000, do we only claim $150,000?  That part seems to be logical to me, assuming we claim the $150,000.  

What I'm really wondering is how we handle the depreciation once we move out and rent the other side.  I was thinking while we're still house hacking and only have half the property rented that I would list the property address on the Schedule E as 123 Main St #A (the rented side) and then claim 50% of any expenses and 100% of the depreciation for the building with the starting basis of $150,000 (since the whole building basis is $300,000).  But once we stop house hacking, do we add the other half of the duplex onto schedule E as 123 Main St #B and then start claiming the other half of the depreciation as of the date it's put in service or is there something else that needs to be done to list the duplex as one whole unit again or going forward will we have 2 separate entries for the duplex on our schedule E and Form 4562 since the 'date acquired for service' are different dates?  Would adding the other half of the duplex for depreciation, after house hacking, be like adding it as if we'd had building improvements made that particular year?

I hope this makes sense as it's being read?  Maybe I'm just overthinking how the depreciation will be handled after house hacking?  Any thoughts on the subject would be appreciated!

I found a new accountant to help with this year's taxes and unfortunately he doesn't appear to know a whole lot about rental property taxes.  I picked up our completed taxes yesterday and fortunately I know enough about our taxes that I was able to look them over and immediately could tell that several items were wrong.  I called the office and was able to come back in to have the items corrected.  Since last night, my wife and I have been going over things again and still have some questions I was hoping BP could help with before I confront the accountant again.

One of his first mistakes was he had a new furnace down as furniture and depreciating it for 5 years, 200% declining balance.  He corrected it to furnace and when I asked him about the 5 years depreciation, he said it would still be the same.  I'm thinking this is considered a building improvement and needs to be depreciated 27.5 years SL?  The cost of the furnace is over the $2500 De Minimus safe harbor amount I could claim, so I believe it will need to be depreciated.

Speaking of De Minimus safe harbor, don't we have to make an election as to which safe harbor we're claiming for the year?  (Safe harbor for small taxpayers, De minimus safe harbor or Routine maintenance safe harbor).  I don't see anywhere included with my taxes where an election was made, not to mention he never asked which one(s) we may be using this year.

Then there's the subject of being a "real estate professional."  I know what the qualifications are to be a real estate professional, but I've read that an election may need to made so that I can treat all my rental activities as one activity so that my hours claimed are considered for all my properties versus needing to prove I spent enough hours for each individual property.  

I think this particular accountant knows taxes, just not specific things regarding rentals.  If anyone can shed some light on these items, it would be greatly appreciated.  

Thank you!

@Logan Allec, thank you so much.  I was pretty sure it's deductible, I just wasn't being able to locate the exact code.  I realize just because I read it somewhere in a book, that doesn't necessarily make it correct, so thanks again for pointing me in the right direction!

If I'm using the standard mileage rate for 2017, can I also claim my business use percentage for my auto loan interest?  My accountant says no, but I've read in books that you can still claim auto loan interest in addition to the standard mileage rate.  I was looking up in IRS Pub. 463 and it says you can claim it, but to include it on your Schedule C.  Would I just claim this on the Schedule E under Auto & Travel expenses?

I'm trying to find somewhere to refer my accountant to, preferably on IRS.gov, to show that it can be claimed.

If we were to buy a rental using FHA, after we've lived in it for a year as required, what then needs to be done to refinance it to a conventional loan?