All Forum Posts by: Matt N.

@Ashish Acharya thank you. Since the taxes paid for the local government (occupancy taxes) is tax deductible, is this also interest tax deductible (money used from cashout refi to pay this tax)?

Thanks. Are taxes considered business use for my rental income? There are 2 kinds of taxes outside of property taxes I pay for. 1) Transient Occupancy Tax (tax I pay my local county in order to operate as an Airbnb) and 2) Estimated income tax sourced from rental income to both state and federal. Are these taxes eligible for this cash out refi interest deduction, as well as just "other expense?"

Hi! For rental properties, are taxes paid (outside of property taxes) deductible? What about estimated income taxes sourced from rental income? Let's say I make $10,000 in one year from rental property. I then pay:

- $1k to local government for a hotel tax (transient occupancy tax in order to operate my rental)

- $4k to federal government estimated income tax

- $2k to state government estimated income tax

Does this mean I can a) deduct $7k from rental income as other expense in schedule E? Furthermore, if I used funds from a cashout refi to pay these taxes, can I deduct $7k portion of interest as interest expense from my schedule E?

Thank you!

Hi, just following up on your helpful response. Once my cash from cashout refi sits in a separate business account, can I use those funds to pay off maintenance HOA fees, property taxes, supplies, etc for the upkeep of my rental property? If used for those types of things, can the interest still be written off?

Hi, just following up on your helpful response. Once it sits in a separate business account, can I use those funds to pay off maintenance HOA fees, property taxes, supplies, etc for the upkeep of my rental property? If used for those types of things, can the interest still be written off?

Thanks. Should I look at this every year to see if my depreciation basis is updated?

Hi there! I just spoke with a CPA and was thrown a bit off guard. He mentioned that because I own a condo for a rental property, that I could take 100% of the purchase price and depreciate it over 27.5 years. I was used to hearing some CPAs say 90% building and 10% land, or even 80%/20%, but his argument was that because I own walls in for the condo, that 100% of my value is depreciable. Is this true?

I came across this article that I found fascinating. How true is this? https://thedarwiniandoctor.com...

Essentially, because my avg rental periods are less than 7 days, and because I do spend lots of time managing my own short term rental, I am eligible to have my airbnb income/losses go against my W2 that I receive from my full time job. Additionally, I can conduct a cost segregation study and take a massive bonus depreciation the first year, which will reduce my taxable income. Has anyone tried this? Any advice? 

Another guy also talks about it here.. https://www.youtube.com/watch?...

Hi! I was reading about the interest tracing rules and it seems like if I do a cash out refi (even on a primary residence) and then put that cash in a separate investment banking account, I can begin writing off interest from the investment. Does anyone know the following: 

1) If this sounds doable, and if there is guidance on what I can do with this. For example, can I purchase stocks with this cash and still write off taxes?

2) What if I use the cash to purchase upgrades for another investment property - can I write off both the cost of the upgrade AND the portion of interest associated with the upgrade?

3) If it just sits in the investment account, can I still accumulate taxable interest year after year until I use the cash for an income-generating property or stock?

Thank you!

Thank you! I was reading about the interest tracing rules and it seems like if I do a cash out refi (even on a primary residence) and then put that cash in a separate investment banking account, I can begin writing off interest from the investment. 

1) I wanted to see if this sounds doable, and if there is guidance on what I can do with this. For example, can I purchase stocks with this cash and still write off taxes? 

2) What if I use the cash to purchase upgrades for another investment property - can I write off both the cost of the upgrade AND the portion of interest associated with the upgrade? 

3) If it just sits in the investment account, can I still accumulate taxable interest year after year until I use the cash for an income-generating property or stock?