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jgordosea
jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 3010
Experience:  I've prepared all types of taxes since 1987.
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what is tangible personal propery tax

Resolved Question:

what is tangible personal propery tax and how does it pertain to a residential home rental in florida

Submitted: 1 year ago.
Category: Tax
Expert:  jgordosea replied 1 year ago.

Greetings,

 

Tangible is able to be touched or having physical existence as opposed to intangible that is not actually a physical item. For example, a stock or bond is an intangible (even though there may be a piece of paper) whereas furniture or equipment is tangible.

Personal property is that which is not real property. Real property is land and the items attached to the land such as buildings.

So personal property is all of the stuff like furniture, equipment and such.

 

Each year the value of the personal property used in business or rental is reported (what was in service January 1 is reported by April 1) to the property appraiser of the county and a small percentage of the value is paid as tax.

See http://dor.myflorida.com/dor/property/tpp/

"Property owners who lease, lend or rent property must also file."

 

The form and instructions are at http://dor.myflorida.com/dor/property/forms/current/dr405a.pdf

 

For more details see http://www.coj.net/departments/property-appraiser/tangible-personal-property-faq.aspx

 

"On Jan. 29, 2008, voters approved Amendment One - a property tax reform package that includes a $25,000 exemption for Tangible Personal Property. Businesses must file a tangible personal property return to qualify for the exemption. Businesses with assets under $25,000 must file an initial return, and will not be required to file again until their assets exceed the $25,000 threshold."

 

For most home rentals in Florida only one return will need to be filed in order to qualify for the exemption not to file because the total value of tangible personal property is less than $25,000.

 

Please ask if you need clarification.

Thank you.

 

 

 

 

 

 

 

Customer: replied 1 year ago.

What if u are not renting any furniture


 

Customer: replied 1 year ago.

I am not a business, I am someone who is renting out my home in florida becuase I can't sell it becuase I am underwater on it

Expert:  jgordosea replied 1 year ago.
Hello again,

As mentioned ""Property owners who lease, lend or rent property must also file."

If there is any property that is not included in the real estate tax value that would be what is part of the tangible personal property.
Appliances would be part of tangible personal property.

Even if there is no furniture or appliances in the rental the Form DR-405 should be filed once to claim the exemption of having to file each year since the total value is less than $25,000. (Zero is still considered less than $25,000).

Again,please ask if you need clarification.
Thank you.

Customer: replied 1 year ago.

How much is the tax for that if you do have appliances?

Customer: replied 1 year ago.

what if the appliacnes were already there when you bought the house?

Expert:  jgordosea replied 1 year ago.

Hello again ,

 

The tax is zero on amounts of property that value less than $25,000.

 

A filing is needed to qualify for that exemption and to not have to file again in the future.

 

Hope that clarifies for you.

\

Customer: replied 1 year ago.

What if you never filed and you have had the house for a few years


 

Customer: replied 1 year ago.

Beause you never knew you had to


 

Customer: replied 1 year ago.

I am just not very knowledgable with this type of thing and want to be

Expert:  jgordosea replied 1 year ago.
Hello again,

If you did not file previously it will be best to file now and show the value is less than $25,000.

That will be better than having the governmental authority come to you to try to collect in my experience.

Thank you
Customer: replied 1 year ago.

Are there late fees on that

Customer: replied 1 year ago.

I just never knew

Customer: replied 1 year ago.

And I want to do what is right

Customer: replied 1 year ago.

so the TPP would be fridge, washer, dryer? What if the range/oven and garbage disposal was there when i bought it?

Expert:  jgordosea replied 1 year ago.

Hello again,

 

It does not matter if you bought them with the house or not.

 

You will just put an estimate of the current value and the original price for the total on line 16a of the form DR-405.

 

See http://dor.myflorida.com/dor/property/forms/current/dr405a.pdf

Customer: replied 1 year ago.

What if you dont have the original price

Expert:  jgordosea replied 1 year ago.

You will just put an estimate of the current value and estimate

the original price

Customer: replied 1 year ago.

Like I said what if it was 6 years ago that you started renting out the home? what are the penalties? brand new that stuff was maybe together that stuff was $3500.

Expert:  jgordosea replied 1 year ago.
As stated, there is no tax when the value is less than $25,000.
Although I can not guarantee how your county will deal with it, in my experience there would not be any penalty when you come forward and file on your own.

It would technically be allowed for them to collect the tax for the six years but the rate is only about 2-3% or about $100 per year.
That would be the worst case and it is most likely there will be zero tax.

Best wishes.
Customer: replied 1 year ago.

It states on the document you forawred me that Do not include household goods: Examples, wearing apparel, appliances, furniture, and other items that ordinarliy found in the home and used for comfort of the owner and his family, and not used for commercial purposes....wouldn't the appliances in the house qualify as that since I used to live there and had all those appliances there....I used to live in that house before I was forced to rent it....

Customer: replied 1 year ago.

I used all those appliances

Customer: replied 1 year ago.

It is on page 3 of the instructions of the PDF Under What to Report, but is #2 on the Do Not Include

Expert:  jgordosea replied 1 year ago.
The instruction for line 16a says

"Line 16 and 16a - Hotel, Motel, Apartment and Rental Units (Household Goods)

List all household goods.

Examples: furniture, appliances, and equipment used in rental or other
commercial property. Both residents and nonresidents must report if a house, condo, apartment, etc. is rented at any time during the year"

See http://dor.myflorida.com/dor/property/forms/current/dr405a.pdf
Customer: replied 1 year ago.

Then what does the info on page 3 mean?


 

Customer: replied 1 year ago.

Under Do not Include:

Expert:  jgordosea replied 1 year ago.

Other businesses do not include household goods.

 

Rental does list all household goods.

 

Sorry the instructions are not better.

 

jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 3010
Experience: I've prepared all types of taxes since 1987.
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