All Forum Posts by: Carlos Perez

If depreciated over 27.5 years the depreciation expense comes out lower than expensing it as a HOA Due.

Thank you all for your responses.

@Greg Scott I used to have a CPA, but I felt I had to constantly fish him for ideas. I will eventually get another CPA, but I like to have an understanding of how things work (accounting wise) while I only have one property.

@Dave Toelkes Yes, it is a rental property. I was thinking of doing it along the lines of what you mentioned.

I was originally entering them as HOA Dues Expense, but while reading over the IRS publications I saw:

"... You can’t deduct special assessments you pay to a condominium management corporation for improvements. However, you may be able to recover your share of the cost of any improvement by taking depreciation."

https://www.irs.gov/publications/p527#en_US_2017_publink1000219144

@Linda Weygant

@Linda Weygant If I were to sell the property within 6 months, the remainder of payments will transfer to new owner. 

Is the roof not considered a common element? Hence I own a share of it. In your structure, if I were to keep the property for the 3+ years, I would have expensed the full $5000 on year 3.  Don't I need to expense it over 27.5 yrs?

Hi, 

Not sure if the tax forum is the correct section to post this. Its accounting, but eventually about tax.

How should Special Assessments be tracked in Quickbooks? And how do I depreciate/tax it?

My HOA created a special assessment of $5000 over 3 years. So $138.89/mo. For roof repair.

Given that repairs like these need to be depreciated (property improvement), I can't enter the $5000 as an expense for the year, nor the monthly $138.89.

Does each year's total payment ($138.89x12 = $1666.68) need to be depreciated over 27.5yrs at the end of each year. Or should I start depreciating the full $5000 from first year even if I haven't made the full $5000 payment yet?

I believe it should be the latter, as any special assessment payment plan should be independent of the of the actual improvement.

I would like to hear your thoughts.

Thank you.

Thank you all very much for your responses. They truly help.

Thank you all for your responses.

@Scott Vance, could you elaborate on Special Assessment (SA) depreciation? 

Does that mean that regular HOA is written off as expense but SA should/needs to be depreciated over a period of time? eg. An SA of $4800 over 2 yrs, I can write off as expense of $200/mo.

Or does it mean that I can expense the HOA + SA (eg $200 + $200/mo) AND depreciate the new roof improvement? Note this property is a building unit and I'm looking into only one (out of 30).

@David Dachtera, Im not too familiar with terminologies. So when one purchases a property in a building, the correct terminology is I purchase a "condominium" unit? And when a tenant rents such property it is they rent the "apartment"? Or is it also considered renting a "condominium" due to the building meeting certain criteria?

In relations to the tax breakdown, in the county site, the Land Assessment line is written as $0. Everything else is related to the School, Police, Debt, etc.

@Jd Martin, So, does the HOA pay for the taxes on the land?

Thank you.

Hi, my first BP question here.

Im looking at a property in the property appraiser website of my county and its showing this property as having $0 land value. The property is a 2nd floor apartment and is part of a condo association.

Main question: Am I allowed to depreciate the full 100% cost of the purchase price given that land assessment is $0? Who pays land taxes in that case?

Second question: The condo association has common area structures such as pool, gym, party room. Am I allowed to depreciate a percentage of those? I would be paying for the "Repair" of those structures through HOA reserves.

Thank you for everything.

Hi all,

I wanted to introduce myself before actually posting a question. 

I'm a software engineer from Miami, FL but I am looking forward to start diving into some buy and hold properties and begin producing some passive income for my future.

I also enjoy accounting and keeping an eye on my finances. 

I'll see you all in the forums.