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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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If I buy an investment home, what can I claim tax wise?

Customer Question

If I buy an investment home, what can I claim tax wise?
Submitted: 9 months ago.
Category: Tax
Expert:  Lev replied 9 months ago.

Lev :

Hi and welcome to our site!
When the property is purchased - generally - that is not a taxable transaction. However - you establish the basis - that is your purchase price and purchase expenses. When the property is sold - that basis will be used to calculate your taxable gain.
Your gain (or loss) would be equal to (selling price) MINUS (adjusted basis).

Lev :

Now - if that property will be used as rental - you will receive a rental income and will deduct your rental expenses.
You generally cannot deduct in one year the entire cost of property you purchased, instead, you can depreciate it. hat is, you can recover the cost over a number of years by deducting a part of the cost each year. A residential rental property is depreciated over 27.5 years.

Expert:  Lev replied 9 months ago.
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Expert:  Lev replied 9 months ago.
Just in case you were not able to use the chat - I am switching to Q&A mode and posting the answer below.
Please feel free to communicate if you need any clarification or have other tax related issues.

When the property is purchased - generally - that is not a taxable transaction. However - you establish the basis - that is your purchase price and purchase expenses. When the property is sold - that basis will be used to calculate your taxable gain.
Your gain (or loss) would be equal to (selling price) MINUS (adjusted basis).
Now - if that property will be used as rental - you will receive a rental income and will deduct your rental expenses.
You generally cannot deduct in one year the entire cost of property you purchased, instead, you can depreciate it. hat is, you can recover the cost over a number of years by deducting a part of the cost each year. A residential rental property is depreciated over 27.5 years.

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