Comments on: Tax Benefits of Depreciation for the Real Estate Investor http://www.twowiseacres.com/taxes/tax-benefits-of-depreciation-for-the-real-estate-investor/ In Pursuit of the American Dream Wed, 01 Feb 2012 11:36:08 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Dawn http://www.twowiseacres.com/taxes/tax-benefits-of-depreciation-for-the-real-estate-investor/comment-page-1/#comment-19994 Dawn Sun, 29 May 2011 20:20:23 +0000 http://www.twowiseacres.com/2007/12/19/tax-benefits-of-depreciation-for-the-real-estate-investor/#comment-19994 Selling my business for 300,000. My accountant has it depreciated down to 90,000............HOw bad will I be hit with taxes, and isn't there away around any of this. I realize that a real estate exchange is what is usally done but for me it isn't an option. This business has put me 98,000 in credit card debt so to pay this depreciaon tax sems ludicris Selling my business for 300,000. My accountant has it depreciated down to 90,000…………HOw bad will I be hit with taxes, and isn’t there away around any of this.
I realize that a real estate exchange is what is usally done but for me it isn’t an option. This business has put me 98,000 in credit card debt so to pay this depreciaon tax sems ludicris

]]> By: Larry http://www.twowiseacres.com/taxes/tax-benefits-of-depreciation-for-the-real-estate-investor/comment-page-1/#comment-18723 Larry Mon, 21 Mar 2011 15:39:50 +0000 http://www.twowiseacres.com/2007/12/19/tax-benefits-of-depreciation-for-the-real-estate-investor/#comment-18723 So if I find myself in the income range where I lose my ability to deduct rental losses, am I still going to get hit for the depreciation shown on my tax return this year when I eventually sell the property even though I couldn't actually get any benefit from the depreciation due to the loss limit? So if I find myself in the income range where I lose my ability to deduct rental losses, am I still going to get hit for the depreciation shown on my tax return this year when I eventually sell the property even though I couldn’t actually get any benefit from the depreciation due to the loss limit?

]]> By: Mike http://www.twowiseacres.com/taxes/tax-benefits-of-depreciation-for-the-real-estate-investor/comment-page-1/#comment-17526 Mike Sat, 29 Jan 2011 21:01:31 +0000 http://www.twowiseacres.com/2007/12/19/tax-benefits-of-depreciation-for-the-real-estate-investor/#comment-17526 Kyle, The short answer to 1) is maybe. Generally, passive losses can only offset passive income. However, with rental real estate, if you "actively participate" in the investment, you can deduct up to $25,000 in losses against ordinary income if you make less than $100,000. Active participation doesn't necessarily mean that you pull up the old carpet when the tenant moves out. You can still delegate many tasks to a manager and qualify as actively participating if you are involved in major decisions concerning the rental property. Income and loss (including depreciation expense) will be reported on schedule E and carryover to line 17 on your 1040. Happy deducting! Kyle,

The short answer to 1) is maybe. Generally, passive losses can only offset passive income. However, with rental real estate, if you “actively participate” in the investment, you can deduct up to $25,000 in losses against ordinary income if you make less than $100,000. Active participation doesn’t necessarily mean that you pull up the old carpet when the tenant moves out. You can still delegate many tasks to a manager and qualify as actively participating if you are involved in major decisions concerning the rental property.

Income and loss (including depreciation expense) will be reported on schedule E and carryover to line 17 on your 1040.

Happy deducting!

]]> By: Kyle Koller http://www.twowiseacres.com/taxes/tax-benefits-of-depreciation-for-the-real-estate-investor/comment-page-1/#comment-16369 Kyle Koller Tue, 14 Dec 2010 16:34:16 +0000 http://www.twowiseacres.com/2007/12/19/tax-benefits-of-depreciation-for-the-real-estate-investor/#comment-16369 TWA, I have two questions that I was hoping you could answer: 1.) As a passive investor making <$100K, can you apply your real estate income losses against your ordinary income, or just the left-over unused depreciation? 2.)Where do you write this income off on your 1040? Your article was great and I definitely enjoyed reading it. I hope to hear back from you soon. Kyle TWA,

I have two questions that I was hoping you could answer:

1.) As a passive investor making <$100K, can you apply your real estate income losses against your ordinary income, or just the left-over unused depreciation?
2.)Where do you write this income off on your 1040?

Your article was great and I definitely enjoyed reading it. I hope to hear back from you soon.

Kyle

]]> By: Motivated Sellers http://www.twowiseacres.com/taxes/tax-benefits-of-depreciation-for-the-real-estate-investor/comment-page-1/#comment-14462 Motivated Sellers Sat, 14 Aug 2010 20:01:12 +0000 http://www.twowiseacres.com/2007/12/19/tax-benefits-of-depreciation-for-the-real-estate-investor/#comment-14462 This is a great post on the tax benefits of depreciation. Too bad they don't let you deduct the depreciation expense for your personal residence. This is a great post on the tax benefits of depreciation. Too bad they don’t let you deduct the depreciation expense for your personal residence.

]]> By: Cam http://www.twowiseacres.com/taxes/tax-benefits-of-depreciation-for-the-real-estate-investor/comment-page-1/#comment-10225 Cam Thu, 20 Aug 2009 13:41:22 +0000 http://www.twowiseacres.com/2007/12/19/tax-benefits-of-depreciation-for-the-real-estate-investor/#comment-10225 Would like to know more on depreciation in Canada. I run a business that prepars depreciation schedules in Australia based on a quantity surveyor's estimate of the building construction costs. Generally the depn rate is then taken over 40yrs @2.5%. Depreciation is recaptured when the property is sold however this is generally reduced by 50% via capital gains tax if you keep the property for more than a year and if you live in the property and then sell your capital gains tax is nil (hence no depn recapture) as it is no longer an investment property. Interested in the Canada situation as am moving there? Also Plant items like stoves, Air conditioners are depreciated at higher rates. Is this the same for Canada? Would like to know more on depreciation in Canada. I run a business that prepars depreciation schedules in Australia based on a quantity surveyor’s estimate of the building construction costs. Generally the depn rate is then taken over 40yrs @2.5%. Depreciation is recaptured when the property is sold however this is generally reduced by 50% via capital gains tax if you keep the property for more than a year and if you live in the property and then sell your capital gains tax is nil (hence no depn recapture) as it is no longer an investment property. Interested in the Canada situation as am moving there? Also Plant items like stoves, Air conditioners are depreciated at higher rates. Is this the same for Canada?

]]> By: loan settlement: Calculating Depreciation for Residential Real Estate Investments « eny8.com.cn http://www.twowiseacres.com/taxes/tax-benefits-of-depreciation-for-the-real-estate-investor/comment-page-1/#comment-6000 loan settlement: Calculating Depreciation for Residential Real Estate Investments « eny8.com.cn Tue, 10 Feb 2009 07:01:37 +0000 http://www.twowiseacres.com/2007/12/19/tax-benefits-of-depreciation-for-the-real-estate-investor/#comment-6000 [...] Tax Benefits of Depreciation for the Real Estate Investor [...] [...] Tax Benefits of Depreciation for the Real Estate Investor [...]

]]> By: Scottsdale Condos http://www.twowiseacres.com/taxes/tax-benefits-of-depreciation-for-the-real-estate-investor/comment-page-1/#comment-1264 Scottsdale Condos Wed, 02 Jul 2008 17:04:00 +0000 http://www.twowiseacres.com/2007/12/19/tax-benefits-of-depreciation-for-the-real-estate-investor/#comment-1264 Great post, I really enjoyed it. I will have to bookmark this site for later. Great post, I really enjoyed it. I will have to bookmark this site for later.

]]> By: Mike-TWA http://www.twowiseacres.com/taxes/tax-benefits-of-depreciation-for-the-real-estate-investor/comment-page-1/#comment-731 Mike-TWA Sat, 23 Feb 2008 15:41:36 +0000 http://www.twowiseacres.com/2007/12/19/tax-benefits-of-depreciation-for-the-real-estate-investor/#comment-731 Troy, Great point. For the rest of our readers, check out this article that emphasizes the point: http://www.twowiseacres.com/2007/09/05/5-tax-free-ways-to-make-money-with-real-estate-investing/ Troy, Great point.

For the rest of our readers, check out this article that emphasizes the point:

http://www.twowiseacres.com/2007/09/05/5-tax-free-ways-to-make-money-with-real-estate-investing/

]]> By: TROY http://www.twowiseacres.com/taxes/tax-benefits-of-depreciation-for-the-real-estate-investor/comment-page-1/#comment-730 TROY Sat, 23 Feb 2008 14:50:14 +0000 http://www.twowiseacres.com/2007/12/19/tax-benefits-of-depreciation-for-the-real-estate-investor/#comment-730 One way to get around the recapture fee is to never sell your rentals. Refinance them and let your kids take over the business. One way to get around the recapture fee is to never sell your rentals. Refinance them and let your kids take over the business.

]]>