All Forum Posts by: John Jones

@Jeff Bridges, you said, I'd have to file a 1040... and "You should file an extension, then get your actual return together properly.  Doesn't seem like you have the items you need and its going to be rushed with mistakes." - I  say "Thank you Jeff Bridges..  I don't mean to disagree when you might be right, However..."  I didn't disagree with your information, but your choices because you were not fully aware of how I was "stitching" all the info together from electric sources.  So I then detailed how I was compiling and calculating everything.  Turbotax was an after thought, as I had backup plan A, B, C etc, since I was determined.  I never claimed I was using software because I didn't know how I was going to get it done atm, and me informing you of all that, wasn't required, as I was just asking my specific questions.  You however made assumptions that I knew all along how I'd do it.   For me, on this end, it was coming together so fast, and with about an hour of the deadline.  Once I saw you were worried I wouldn't have the right forms, it was then that i updated you to let you know I had used turbotax to fill out the forms, so you'd understand It would have all the right forms.   --  But only like 1-3 hours prior I didn't even know how to run turbotax, nor did I fully know the complete list of forms.  When I you wrote that, I went back to TT and looked to find it indeed had a 1040 and more forms chosen for my situation.   So the only thing I disagreed with, was about whether or not I had all the forms and explained that turbo tax would have them once it suddenly was dawning on me.  Again remember, when we started, what I didn't know was I'd use TT.  

You also said "you said you were just going to mail the..." Schedule E and forms etc.   So you assumed I e-filed.  Instead, I had the net glitching and too much to go into, plus I don't like the idea of giving all my person info to Intuit.  So I actually did print the forms, get an envelope, stamps, and mailed them like 10 minutes before the mailman came.  I just made it (to my mailbox).   So I gave all the detail neccissary to do the job and just make it.   However, I'm sorry the detail lacked to give you the full picture of how I was doing this... and sorry that it looks like you took this as me saying your advise was wrong, which it wasn't.  Seems like you got irritated, then started with the "Next time" stuff.   I typically don't tell people "Next Time" and what they should do etc, in that manner.  That's more important to know then to worry about "being wrong", which actually you weren't... only in that you were misinformed about how I actually had the right forms, and even I didn't know it right off.  

And you're right, if I'd e-file I don't have to mail a copy, but this was yet another assumption.  There's an option to print and mail, and it just so happens that with the issues I had here, worrying about comcast turning on and off, plus other reasons, it was no big deal to print, and stick in mail box, and it worked fine.   Idk, maybe you weren't trying to come off as telling people what to do, rather they suggesting,. but it seemed that way.   I think what got you was when you didn't understand which part I was disagreeing with.   Only disagreeing that I didn't have the right forms, because I had just, in the last few minutes, noticed them all listed in the software.   I was getting all sorts of problems, then it just like all suddenly came together and was all working.  It was my first time doing everything, including TT with landlord, ever.   I DO, however appreciate the advise and links.  

the reason I came back today, was I filed 2017, but still have not filed 2016.  It's all the same situation where I owe nothing, but will have to scout around to figure out if I can make 2017 print a 2016 form, or I need a 2016 update, or entire 2016 version of TT (which I doubt).  Also the program did ask me questions about when I started, (2016), so I'm not sure if the IRS will just be happy with it that way, but I think I better sent it, even if I owe nothing.  I just have to figure that part out.    I also don't know what IRS thinks of still not having 2016 done which should have been filed in 2017.   I do however remember seeing somewhere how to do back taxes in turbo tax.. Either that or I imagined it.   

Thank you Jeff Bridges.   I don't mean to disagree when you might be right.   However, I prepared all the forms with the TurboTax Premier which is the version for landlords.   I first talked with a tax attorney who gave me some brief advise, which is where I learned about depreciation.  He is a very popular in the area and wouldn't take on any new clients.  So I asked him if I could use turbotax premier to file, and he said that I could.  It wasn't really that hard, however seemed that way to me because I hadn't done it before.   So one of the places I reached out was this forum to ask extra questions about depreciation in a previous post and now this post.  Then I realized I owed nothing, wondered what would happen if I couldn't get turbotax to print out the forms.  But now I have.  The product says it's guaranteed not to make mistakes. Being that I have no other income at the moment, and it's below the threshold to pay taxes, no money is owed. I doubt turbotax would put out a program that wouldn't generate the correct forms.  Within the program it prints a sheet that tells me the official address to mail the return to.   That said, I just checked the pdf it made and it includes a 1040 in it.  Looking through it has other forms as well.   It also has icons I click that list all forms by number needed.  So I hope that everything is ok.   The reason I don't think it will have mistakes is because it has two built in checkers and the program basically led me through like 80 pages of questions.  When I ran the checker it found two mistakes, and asked me to fill in missing details.   It looks pretty good.   I hope it's ok.

Thank you for tips.  Hey I think I got it done!!    Now my last question is if I owe no money, I think I just take the Schedule E form and the other for state, and mail it today to the address.  If I understand, it only has to be postmarked the 17th to be on time.  So they would receive an envelope with the forms, but no check, nothing else.  Is that all I need to finish then?  The only thing is I think I want to recheck for any errors or anything missing.  Not sure yet, but it looks done.   So if that's it, I'll just put it in the mail.  If someone could let me know if that's all the more needed, that would be great.  Also thank you for the responses.

I had to rent out my place to help my mom after my dad became ill then passed away.  The point is that sort of thing caused me to get swamped, and I never intended to rent.   So filing is new.   I want to get it done by the deadline today, and many things didn't go just right.  I'm so close to being done, I for sure only need at most until Wed or Thur, but am starting to wonder if I will get taxes filed by today (Tue).  I'll be on time for 2017 filing if I make it by today.  This is the 2nd year renting.  I didn't file for 2016 at all because that's when he had his stroke, and again swamped.  I knew however that it didn't make enough to be taxable.  I know it's not an excuse not to file, but it wasn't on purpose.  I calculated what I owe for 2016 and 2017.  2016 is late, but I wouldn't owe any thing in taxes as our family lost it's main business, and total income is under the threshold to pay taxes.  I may make it to be on time today for 2017 taxes, but again, the total earned wouldn't require me to pay anything either in taxes.  I do know they must be filed and will do that.  But let's say I can't get it out today, will I lose my deductions such as depreciation or repairs?  Or be punished even if I'm quick enough submit it by mid week or Thurs?  Or should I call someone?  Or since I really don't owe anything, I shouldn't be that fearful if I hurry?  In other words, Must I make it by today?  opinions?  thank you.

oh, ok, I didn't see the corrected posts, (autocorrect) and additional ones.  So you don't think it's true, which has me thinking more, but looks like maybe it's not quite as bad as I originally thought, if that's the part you don't think is true.  Also didn't see the new post from Basit.   Makes me wonder if I they only look at tax bracket a person is in at the year of sale or average things out.  Very interesting.  thank you.  Being new to this, and as the night goes on (lots of coffee), what's easy for the pros makes my head spin a bit, lol.  But It's good to know people here know their stuff.  I'll be looking at all this to get hopefully get a better picture, that is before I'm forced to file.   Thanks again.

Very interesting.   After what you both said, I tried to figure out approximate figures for both scenarios and it seems I come out further ahead by taking depreciation, regardless of income.  The article almost made it seem if someone made a correct choice by being 'savvy', they would avoid taking depreciation and make out better.. But it doesn't seem to be the case.  I'm so close to the deadline, but hopefully I can figure it all out by tomorrow.  From the advise given here, I feel like I better understand that part now and will take the depreciation.   Thanks to both of you.

Hello.  In trying to help my mom after my dad passed away Christmas, I rented my place out.  Having never done this, and rushed by the deadline to file taxes, I'm confused on some points.  On advise pages it's suggested to take the amount the home depreciates into account.  However, I came across a page with how doing so could be a costly mistake for some depending on their tax bracket.  This page can be googled by searching for "Property Depreciation: Why the Tax Benefits Could Come Back to Bite You" - shows stressed guy in front of laptop. -  A home depreciates every year.   So this depreciation can be counted as costs out of any income made to offset those losses.  

I'm in the low 15% tax bracket atm.  In figuring out my taxes, I seems I only owe a few hundred dollars.  Let's pretend $500 for now.   The article points out that if the home is sold later, the IRS wants this paid back in recapture fees at standard rate of 25%, regardless of if the person is in the 15%, 25%, 28% or whatever bracket.  So it's point seems to be that people in a low tax bracket could lose more money in the long run.  But some people who don't file the depreciation also lose money if they are in higher tax brackets.  It all depends on what they bring in that year.  If I understand it, I think I'm going to lose money down the road by claiming depreciation.  But was hoping someone more knowledgeable could confirm what I think is true or not before I attempt to file taxes by tomorrow.

The web gives 3 tax bracket examples of 15%, 25% and 28%.  Example:  "Dave buys a single family rental for $100,000 and determines that his improvement ratio is 90%. Therefore, his improvements are valued at $90,000 (0.90 x $100,000) and will be his cost basis for depreciation. Dave’s annual depreciation will be $3,723 ($90,000/27.5).   Assuming that his annual depreciation brings his Net Operating Income (NOI) to $0.00 each year, Dave saves $491 annually (0.15 x $3,723). If Dave holds the property for ten years and then sells it, his ten years’ worth of depreciation will have saved him $4,910, a solid savings indeed.  But what Dave doesn’t realize, likely because Dave didn’t consult with a real estate savvy accountant, is that Dave has to repay the total depreciation taken at a 25% rate. The total amount of depreciation Dave took over ten years was $32,730, meaning his recapture taxes amount to $8,183. Annual depreciation actually costs Dave $3,273."

*** It then gives 25% example and shows how that person doesn't really lose and so on.  Going to the site to see their chart makes it easier to understand.  Anyway, in my case, my depreciation is higher than the example..   Yet due to the the fact I didn't make that much this year, in 15% bracket, I only owe a few hundred.   Therefore I could easily be tempted to wipe out what I owe by filing the depreciation so that I would wind up owing zero taxes.   But if the article is correct, and I go to sell the home later, I would owe 25% of whatever depreciation I took this year later on down the road.  If we use the above example and pretend I own Dave's place, and then sold it, I'd owe $8,183 for this year to be paid in the future as recapture fees...   But I just said I only owe about $500 in taxes this year.   So for me, that would mean I'd actually lose $8,183 - $500 = I would lose $7,683 when I go to sell the place years later.   To top it off, I don't even know if there's any cumulative or recurring fees on this.  

Now that might not be a bad thing if I made enough so that I owed more than $7,683 in taxes this year, because it would just even out later.   IT seems hard to believe, but again, it looks like If I file depreciation, I will lose big time.  Can anyone confirm I'm looking at this the right way?   Because most people are (hopefully) in a better position, with a rental and alternate income.  They make more money and therefore take the depreciation etc.  But this is not my case this year.  

It's the 16th, and I only have until tomorrow to file taxes.  The only income is the rental right now.  With no suggestions, I will likely just not take the deprecation because I think the article is correct.  And that's scary to think I'd lose nearly 8 grand.   But any help, ideas or guidance would be greatly appreciated since I'm totally new to what I'm trying to do here.  Thanks.

https://www.biggerpockets.com/renewsblog/2015/08/23/depreciation-bite/