All Forum Posts by: Lisa Mason

Rob,

Thanks for the reply.  I realize that my net loss for my rentals will offset my other income, but the home office deduction cannot be claimed unless you have a net profit (I.e. it cannot offset "regular" income only business/rental income).

So I guess what I'm asking is, do I need to enter in my home office deduction now and have it carry forward, or do I just wait until I have a net profit in 2015 and then enter my 2014 home office deductions?

Does anyone know if you have a net loss for the year, do you claim your home office deduction that year and carry it forward, or do you "not claim" it, hold on to the info, and claim it when you have a net profit for the year?

I do my own taxes.  This year we really expanded our rental business and I set up and used a home office; I have all the required documentation to claim the deduction... just confused about if I actually enter everything this year, or hold onto it and wait for a profitable year.

I have the book "Every Landlord's Tax Deduction Guide" and it says:
"If you have enough rental income to take a home office deduction this year, report the amount (up to the profit limit) on line 18 of your Schedule E.  If you don't have enough rental income to take a home office deduction this year, write nothing in your Schedule E.  Keep your record of your home office expenses to use in a future year when you have more rental income."

In another place in the book it says "Whether or not your business is making money, you should keep track of your home office expenses and claim the deduction on your tax return."

The two statements seem to be contradictory to me.  Any insight?  Thanks!

*Bump*  

No one?  Come on, I know someone knows the answer to this!

I have been a follower of the Bigger Pockets blog for quite a while, but this is my first forum posting.  Thanks in advance for the help from all you experts out there!  I'll try to keep this concise:
We bought a duplex in 2014 and are living in one unit and renting out the other.  I am thinking into the future (we wont be living here forever) and am wondering how depreciation, etc. will be handled when we convert to 100% rental use.  Here's a concrete example:
  We are planning to have gutters installed.  Currently there are no gutters on the house, which is contributing to some water in the basement.  My thoughts are that this could be considered a repair OR an improvement, depending on how you look at it...  If we treat the gutters as a repair, and say they are $2,000, we would deduct $1,000 (50%) as a repair for the rental unit and do nothing with the other $1,000.  Once we move out and convert to 100% rental, we could take the current market value of "our half" of the gutters and add that to the basis of the house, half of the gutters would then be considered an improvement and would be depreciated over 27.5 yrs. with the house.  Is this thinking correct?

The other option I have considered is treating the gutters as an improvement and depreciating 50% of the cost starting in year 1.  Once we move out and convert our unit to a rental, we would up the "business use" % to 100% until the gutters are fully depreciated.  In this case we would "lose out" on the depreciation of the gutters during the years that we are living in the house, so we could optimize by depreciating using a straight-line method instead of a 200% declining balance (or similar).  Does this line of thinking make sense?

Sorry for the lengthy post!  Thanks for the help,
Lisa