How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask RD Your Own Question

RD
RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience:  CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
510454
Type Your Tax Question Here...
RD is online now
A new question is answered every 9 seconds

Hi. I am a real estate professional with three properties under

Customer Question

Hi. I am a real estate professional with three properties under development (rental, remodel, etc) and I want to know if I file a schedule c for my company (shetland real estate) or just schedule E for each of the properties. I want to be able to take business deductions as well as the standard property deductions.
Submitted: 5 years ago.
Category: Tax
Expert:  RD replied 5 years ago.
Your tax accountant is right. All the expenses related to the property remodelling will be capitalized to the cost of the property. When you sell the property - you will expense that as part of the cost of the property.

For rental property- you will capitalize the expense and depreciate the property reporting it on Sch E.

Routine operational expense not related to remodeling of the property such office expense, utilties, admin staff etc can be expensed on Sch C.

Let me know if you have any question.

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.
Customer: replied 5 years ago.
thanks so much. that was really helpful. I just have one other point of clarification. I did not accept your fee yet, as i thought that might have ended the session, but i certainly will do it. does my acceptance create an end of our session? I have never used this before.

So here is the other question. My tax accountant says that if I file a "c" with no "profit" as the "profit" will all be on "e" that it will be a tip off to the IRS for audit. Similarly, if i file for any home office expense, that will also be a tip off and that will trigger an audit. I see his point as the "C" expenses do appear to be "pass through". In 2008 for instance, i had one rental property (creating income on e) and two alternate properties that i was "developing", looking at, researching, getting ready to buy. Ultimately, I did buy in 2009.

Also, can you address my other question on my first set of questions, which was "on schedule c, i must identify my business in a category on line A, which is a code. The code I think that i would put is 531390, which is in the real estate category: Other activities related to real estate. I am leasing some properties and developing others.

Ok, so i think that is it and i will definitely pay your fee. thanks for your help. Is there every a way i could initiate another session and get back to you? thanks. thayer
Expert:  RD replied 5 years ago.
Acceptance does not end the session. You can ask any question or clarification you may need.

On Sch E- the rental income will be reported. Any gain or loss on sale of the property will be reported on Sch C when you sell the property for profit. Expenses related to rental property will be reported on Sch E and related to other activity on Sch C. Loss on Sch C for a year or 2 will not trigger an audit if the expenses are incurred in ordinary course of business and not of the nature that needs to be capitalized with cost of the property that you are developing. You will not be able to claim home office expense until you have profit on Sch C. The home office expense will be carried forward.

The code you mentioned on Sch C is right.

You can initiate other session and request me on the post as FOR RD.

Let me know if you have any question.

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
 
 
 
Chat Now With A Tax Professional
RD
RD
7114 Satisfied Customers
CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..