If legal fees or eviction costs arise, they’re also deductible as ordinary and necessary expenses.Keep detailed records of every expense for accurate tax reporting!

The 1245 property (think personal property and bonus depreciation) is recaptured at ordinary tax rates though… so the new property must have an equal amount or more 1245 property. 

I often had clients that didn't understand what it meant to be ordinary and necessary. 

He says he usually gets away with $100, with $500 to $1000 being a max he would deposit if it was an extra ordinary deal.

If the carpet is damaged beyond ordinary wear-and-tear, then you deduct from the deposit and charge anything remaining.

That is not out of the ordinary. 

However, keep in mind that rental income will be taxed as ordinary income, so the more you earn, the higher your taxable income.

In the ever-evolving world of real estate, I’m here to transform the ordinary into the extraordinary.

You would have depreciation recapture on the items you depreciated (75k), taxed at ordinary income rates and then any of the actual property appreciation would be taxed at favorable capital gains rates (50k). 1031 exchange will allow you to defer all of that gain as long as you meet conditions.

•Depreciation Recapture: When you sell a rental property, depreciation you’ve claimed can be “recaptured,” meaning it’s taxed as ordinary income up to a certain limit.