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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 17080
Experience:  10 years experience
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I want to lower my taxes by investing in a property. Can I

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I want to lower my taxes by investing in a property. Can I also live in it? Any other tax suggestions? I earn $300k/year and currently renting a property and don't have a real tax strategy to lower my taxes.

Wallstreet Esq. :

Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarification.

Wallstreet Esq. :

To be treated as a rental property for tax-loss purposes, your personal use of the place can't exceed 14 days or 10% of the days the unit is rented during the year, whichever is greater.

Wallstreet Esq. :

In terms of a tax advantage, if you purchase a primary residence to live in especially in high tax areas in NY such as Nassau or Westchester County, you can offset your personal income taxes by the real estate taxes you pay, including mortgage interest.

Wallstreet Esq. :

If you purchase a rental or investment property their are several more tax deductions for you and will reduce your overall tax rate, especially if you can claim a loss through depreciation and improvements to the property.

Wallstreet Esq. : Tax Deduction Checklist - Rental Property
<table border="0" cellspacing="1" id="checklist">


Item
Deductible
Non- Deductible


Accounting Fees
Yes




Advertising
Yes




Agent Fees & Commissions
Yes




Bad Debts
Yes




Boarder's Costs
Yes




Body Corporate Fees
Yes




Borrowing Expenses
Yes




Building & Structural Improvements
Yes




Cleaning
Yes




Commissions & Management Fees
Yes




Depreciation
Yes




Early Termination of Lease Payments


No


Electricity & Connection Costs
Yes




Eviction proceedings against tenants


No


Bank Charges
Yes




Gardening
Yes




Gas
Yes




Head Rental*
Yes




Insurance
Yes




Interest
Yes




Land Tax
Yes




Lease Incentives
Yes




Lease Premium


No


Lease Surrender Payments


No


Legal Fees not associated with eviction
Yes




Mortgage Insurance
Yes




Municipal Rates & Taxes
Yes




Office Supplies
Yes




Postage
Yes




Repairs excluding initial repairs
Yes




Security
Yes




Solicitor Disbursements
Yes




Telephone
Yes




Travel
Yes




Water
Yes




Pre purchase travel expenses for properties not purchased


No


Wallstreet Esq. :

http://www.propertyinvestment.net.au/tax-deduction-checklist.htm

Wallstreet Esq. :

The above list shows the many tax advantages of owning an investment property.

Customer:

Thanks for your response. Just to confirm, if we buy a property and live in it (as our primary residence) and get an interest only loan for a period of say 5yrs, we can offset the entire yearly interest paid against my income taxes?

Wallstreet Esq. :

Home mortgage interest is deductible on your income taxes if you itemize. You can deduct the interest on up to one million dollars of home mortgage debt, whether it is used to purchase a first or a second home

Customer:

thanks very much, very useful.

Wallstreet Esq. and 3 other Tax Specialists are ready to help you