All Forum Posts by: Rick Jones

Hi All,

So might be a stupid question but here goes... What is the best way to categorize expenses that are for your overall business operation when you have several properties? For example say I purchase a printer, stamps, and laptop for business use. These 3 items would be used across the 7 properties I own so how would you note that on a schedule E come tax time since its used across the board for the overall operation of the business and not linked to a specific property. In the past, I have just placed each item with a different property on the schedule E but I feel like this is inaccurate and there must be a better way.

Thanks!

Rick

Call QNB bank. Been doing alot with them, they portfolio their investment property loans. Also try New Tripoli Bank. Good luck!

Probably won't move forward with this idea.. I suppose when you think about it it does come across a bit dishonest to list an address for the business and not have any intent of using it as such. Post office box would work best for this I think. Thanks for your input!

@Stanley Parsley

It may have come across wrong how I wrote it but I assure you there is no malicious intent here! It would be solely for convenience and would also allow me to have my personal address not listed on public records documents and leases.

Not sure if this is locality dependent or not but I'm purchasing a 6 unit building and I am wondering if I could add a 7th unit just to list as an address for my LLC. I would also just use this as my business address and receive rent checks and other business related mail at this address. I am not actually planning on physically adding a unit within the building. Thoughts?

This is when I get confused. 2 other CPAs just said I can't deduct it and another says I can. Can I get some clarification on this please?

In PA at least, at closing the seller is reimbursed for taxes paid extending into the next year so it's more then just the 2 months. Also interest paid is to a private lender with a relatively high rate, but still a couple thousand. I suppose your right though, nothing to worry too much about. First time doing taxes on my own since getting into RE. Guy doing them before was screwing them up for years I come to find so just want to make certain I'm doing everything right!

Would this apply to me? Based on this I would have to make a special election to capitalize property taxes, interest, carrying costs for 2016 and would depreciate them with the property once in service in 2017.

"Reg §1.266-1(b)(1)(i) provides that a taxpayer which owns unimproved and unproductive real estate can elect to capitalize annual taxes, interest on a mortgage, and other carrying charges. The election must be made annually. The election requires a statement in the taxpayer's return setting forth the description of the property and the expenses to which the election applies. In addition, if the property produces income in a given year, the election is not available"

http://www.law.cornell.edu/uscode/text/26/163

So the property taxes paid for this property in 2016 that I bought specifically for use as a rental property/business use is not deductable in anyway? Something just doesn't sound right about this. Can anyone provide documentation supporting this claim?

Yeah, this is property number 7 so I can't qualify to use the up to $5,000 business start up costs if that's what your getting at. Couldn't I classify it as a second home in 2016 and then in 2017 reclassify it as a rental. This would allow me to deduct the bulk of the expenses incurred in 2016. Any rehab costs would be added to the basis regardless of if the property is a rental or second home so what would I lose out on?