From what I understand, you will deduct $400 from the total deposit and return $600 (assuming no other damage).Now let's say the damage comes out to $1,500, in this case, you will keep the full $1,000 security deposit and take the tenants to small claims court for the remainder of $500 damage.

Can someone give me some clarity on what is deductible against capital gains in commercial real estate?

Its not as if you're going to be able to do the usual walkthough and deduct cleaning or repairs from their deposit.

The home we inherited does not currently have a mortgage on it.We are looking at refinancing our primary residence, and I'm thinking there will be a tax benefit to shifting some of our debt to the rental property, but I was hoping someone on this forum can validate or disprove my thinking.Every year we end up paying the Alternative Minimum Tax, which makes a portion of the mortgage interest on our primary residence non-deductible.

You can start deducting expenses, like maintenance, utilities and depreciation on that date before you get rental income.I could send you a more information if you wish to PM me and start an e-mail conversation.Sheldon

A few weeks later your bank says the check is a forgery and deducts the full amount from your account.

The rules are somewhat complex and under certain circumstances you may be able to deduct an imputed interest from your taxes while the seller may have to pay tax on imputed interest earned.The other good thing about the interest-free loan is that your capital gains tax when you later sell the property should be lower because your cost basis was an extra $20,000 to begin with.

Levying fines for not being your bit-- is something else entirely.

Just last month, one of my tenants asked if he could buy some grass seed for a bare spot on the lawn and deduct it from the rent

(2) Increasing government regulation on how much profit I can make from each property I lease or rent (3) Increasing taxes of some sort or reduced deductions or depreciation limits, which futher hit the bottom line.