If you're borrowing rehab dollars, then the hard money lender will typically hold those in their own account and distribute them to you as draws after work is done.

Originally posted by Account Closed:Originally posted by @Jack B.

These type of items become part of the premises and are expected to have a serviceable life of several years ... as such they are capitalized.There is generally plenty of grey in the middle and that is where having an experienced accountant is beneficial.

Account Closed - There would be many commercial lenders willing to consider this. 

Do you have anything in your lease that specifically holds them accountable for plumbing clogs?

I do put more aside for capex than most people to account for the possibility, but haven't really tapped in to that.

@Jason BocekIf you plan to file your own return - You should look into reading the following form instructionsSchedule E - supplemental income and lossesForm 4562 - Depreciation & AmortizationForm 8582 - Passive Activity Loss LimitationsHowever, you may be better off find a professional who can prepare your returns correctly and provide you tax advice.Your rehab expenses may need to be capitalized if it was paid before the property was livable.You should be entitled to other expenses outside of interest, taxes, insurance(remember paying down loan balance is not a deduction).You should interview a couple accountants here on BP.

Here is a really good example of Michael's analysis from Quora - https://www.quora.com/How-much-taxes-can-you-save-...Either person would be a great partner to have!

Any advice or accounts from previous experience will be well received!

However, would most consider the $116k personal income and have a bank account where it all flows into for spending however you see fit, be it reinvesting, personal travel, etc... or would you consider it business revenue and take a salary?