Your Rental Property’s Tax Benefits
When it comes to tax time, most people want to claim all the deductions possible. However, many simply may not even realize all the minor details they are overlooking. We’ve discussed the tax benefits of homeownership, but rental property is another area chock full of deductions.
Stephen Fishman has a more complete list with more in-depth explanations of each item in his article on nolo.com, but here are some of the most common rental property tax deductions:
Interest: You can deduct all interest on any loans used for property purchase or improvement, as well as interest on any credit cards used for purchasing related supplies or services.
Repairs: Got a leaky faucet? Broken window? Look on the bright side — the repair costs are tax-deductible!
Travel costs: Your mileage and any dining or lodging expenses related to rental management is tax-deductible. You can either deduct actual costs, or use the standard mileage rate, which is a certain amount of money per mile (48.5 cents in 2007, according to Fishman).
Insurance: Whether you buy flood, fire, theft insurance, or all three, the premiums are fully deductible!
However, if you are getting into the rental market, save receipts as proof in case the IRS decides to audit you. And beware of getting involved in shady real estate partnerships where tax evasion may be involved. Tax trouble will mess you up for years to come, so taxes should be taken very seriously.
January 24th, 2008 at 7:45 am
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February 12th, 2008 at 8:37 pm
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March 27th, 2008 at 6:03 pm
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June 6th, 2008 at 11:01 pm
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