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I'm not sure what your question is? Can you sell the property? Since it isn't your primary residence & since you probably aren't insolvent, you may have reportable income if your debt is 'forgiven".
What state are you in & where's the home you are talking about?
The property was refi in 2008. it was appraised at 330,000 then. i currently owe 264,000. The current tax from the county says it is only worth 233,00. So it is upside down. If i declare it as a rental then i cannot foreclose on it. I just thought that renting it might be a way out of this mess till the market swings back around. However renting it does not appear to say me anything.
Gig harbor, Washington
Well you need to factor in the problem with the 'phantom' income if the property is foreclosed. There would be no exception available to the rules for recognizing gain on the forgiveness of indebtedness. That alone is a reason to rent it & gain some tax benefit while you wait for the market to recover; what do you mean "declare it" as rental property? Renting a personal residence while you attempt to sell it does not turn it into "rental property" for tax purposes although it is treated the same way.
All my friends say that they write off thousands of dollars on their rentals. In doing my taxes this is not the case. my wife and i work and both claim married &0. At the end of the year we claim married &4. after spending 12 hrs last Sturday with turbo tax we get a whopping 1170.00 back. Seems like we got screwed. I have to declare the rental money from my kids/tenants under the rental property section of the tax software.
Can i take advantage of the homebuyers program for 6500.00. my settelment papers says 5-15-2010. However we were in verbal negotiations in March?
Well, you also have to figure depreciation on the rental. Depreciation is "allowed or allowable", so if you don't claim the depreciation, you get charged for it anyway when you sell or dispose of the property. Hopefully, you are renting the property to your kids at a fair market rent, otherwise you won't be able to claim any loss on the property.
You're talking about the house you said you found in June as far as the credit goes?
We take a lose of 100.00 a month on the rent.
Yes the house we bought was closed on and we moved in at the end of June 2010
Assuming all other qualifications are meant, you would have had to have a binding sales contract by April 30, 2010.
Then there is the lived in a prior principal residence for 5 out of the previous 8 years; I haven't tried to fit that requirement to your facts.
It seems that the house you are now renting to your kids would meet the 5 out of the last 8 year requirement;
we were negotiating on the home everything was verbal till may when we had the settelment papers drawn up so sounds like we missed it by a few weeks. Dang...
by claiming the rent from the rental house as income it kicked us into a higher tax bracket. I guess i will have to consider this next year. i figured it was a wash since it almost paid the monthly mortgage on the rental. Hopefully next year will change and i will have more to write off.
will i be able to depreciate more each additional year the house is rented?
Residential rental property is depreciation using the straight line method over 27 1/2 years, so the depreciation would be the same for a full year.
On the other topic, was there even an offer, signed by both parties before 4/30/2010?
the communications was between the realators. we would fill out an offer "good faith" Then the other realtor would talk with her clients. i have no paper signed by all parties then.