All Forum Posts by: Katie L.

@Nick Mercurio Property tax payments are usually due twice a year, payable before the due date. The dates vary by county. Most though will have a due date in the beginning of the year such that you have the option of paying it in the prior year. For instance, say property taxes are due June and January. You'll pay the June in year 1 which is deductible in Year 1. But the January payment you have the option of paying in December to deduct in year 1 or January to deduct in year 2. Depending on your tax situation the timing of that deduction could make a big difference especially for rental property because there's no phaseout on deductions like there is for itemized deductions for your primary residence. If you're anticipating big income one year, you could have up to 3 property tax payments in 1 year (January, June, December for the following year)!

Okay, then there's a lot you'll want to think about depending on your other income and your financial situation.  You'll also want to think about liability protection too, and an estate plan if you don't have one already.  Make sure you find someone who is well versed in depreciation and 179 expense and also think about the timing of when you pay property tax deductions.  Then, depending on if you or your wife have a traditional day job, you'll definitely want to consider making estimated payments to avoid underpayment penalties.  I'm based in San Diego otherwise I'd offer to work with you but that would be a bit of a commute for you.  Oh, and if you're living in the duplex yourself there are additional considerations like 121 exclusion and home-office expenses and depreciation.  Hope that helps some!

Hey Nick,

Are you holding your duplex as individuals/sole prop or within an entity?  Will change some of the accounting and tax consequences.