Ask Terry Questions Rental Property and taxes

Rental Property and taxes

By Terry Savage on July 15, 2018 | Housing / Real Estate

On rental property when I due repairs on that rental house, how much do I actually get to deduct from my gross income. EG. $3000 for new room. how much can do I get to deduct . Am wondering because when I do repair or replace items for the rental house, should I spend a lot or find the cheapest price.

Terry Says

There are several ways to handle the expenses that come along with improving or repairing a rental property. For starters, you could add the costs to your “basis” for owning the property. That way you would have a higher cost base when you sell for a gain. Or you could create a company of some sort that manages the properties and can deduct expenses against rental income. I strongly suggest that you work with a tax expert — a CPA — to set up a system that makes the most sense.
Here’s a book that should help you get the big picture, tho its a bit out of date. It’s called the Landlord’s Handbook, and here’s a link to it on Amazon. It will not only help you structure this business but show you how to answer that question about what type of repairs, updates are worth making — depending on your plans for holding on to the property.



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