All Forum Posts by: Winston A.

I am trying to calculate my building basis for tax purposes.

Can I add the items under the heading "Adjustments for items unpaid by seller" on my HUD statement? Specifically, "County taxes" on line numbers 211? This was just a reducton to my loan, so Im not sure If I should add this to my basis.

I know I can add closing costs such as the title charges, recording charges, and transfer charges to my basis, but Im not sure if I can add the adjustments to my basis.

Thanks in advance for any feedback.

I’m trying to determine my Building basis for depreciation.
Should I use the lower of appraisal cost vs county tax assessor? Or does the IRS favor one over the other?

My appraisal cost gives a lower percentage to building -77.6%
Land - 65,000
Building - 223,390
Total - 288,390

Per County Tax Assessor - Building Basis is 84.32%
Land - 63,480
Building - 341,400
Total - 404,880

Thanks in advance,

Winston

Thanks Stephen.

Do you mean Version 1 is the correct one? You said that purchase cost is applied before you apply the building percentage in your first sentence (which version 1 does). Then you say version 2 is correct in your second sentence.

I was just using the 75% as an estimate. It is actually higher.

Hello,

I bought a building for $200,000, and was wondering if add the purchase cost to the building before OR after the allocated building % is applied.

VERSION #1
Purchase Price: $200,000
Purchase Costs: 5,000
Total: $205,000
Building % 75%
Building Basis: $153,750

VERION #2
Purchase Price: $200,000
Building % 75%
Total: $150,000
Purchase Costs: 5,000
Building Basis: $155,000

Thanks in advance for your help,

Winston

Hi Chris,

I had a supplies expense of about $10,000 relating to the rental property. Since it is related directly to the rental property, can I deduct 100% of this? Or would I have to pro-rate it at 50%?

Thanks in advance,

Winston

I own a duplex rental property in which I live on 1 of the floors?

I am married, and our AGI is $125,000.

Can I deduct half the PMI insurance paid on our monthly mortgage on Schedule E? Or is our AGI too high?

Thanks in advance,

Winston

Do I have to fill out Part II “Special Allowance for Rental Real Estate Activities with Active Participation” of form 8582 “Passive Activity Loss Limitations”?

I am married, and our combined AGI is $125,000.

We make all the decisions regarding our rental property. Our total loss this year was about $20,000. Can I deduct this total amount?
Or is my loss limited based on our AGI, and we can only deduct $12,500?

Line 5: 20,000

Line 6: 150,000
Line 7: AGI 125,000
Line 8:(Subtact line 7 from line 6) 25,000
Line 9:(Multiply line 8 by 50%) 12,500

Line 10:(Enter smaller of line 5 or 9) 12,500

Thanks in advance,

Winston

I meant Form 8582, sorry.

Just thinking about this, form 8852, "Passive Activity Loss Limitations," for the current year would be affected by my 2010 amended return (for a Sch. E item; Sorry, I did not mention this in my post.)

On form 8852, part 1, line c, "Prior years unallowed losses," would be incorrect if the IRS did not approve my 2010 amended return (for the Sch. E item., which would affect form 8852.)

If the "Unallowed Loss" from form 8852, page 2 "Worksheet 5 - Allocation of Unallowed Losses" on my amended return form 8852 is incorrect, that would mean form 8852 for 2011 would be incorrect as well, and then I would have to amend my 2011 return for the incorrect amount on form 8852, part 1, line c "Prior years unallowed losses."

Thoughts?

Thanks in advance.

Thanks again Steve for all your help. I know you replied to my earlier topic with similiar question. I just wanted confirmation on the cost basis. But Im pretty sure you are correct.