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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 577
Experience:  10 years experience
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I'm a real estate agent, I just purchase a property for

Customer Question

I'm a real estate agent, I just purchase a property for investment for myself, What are the benefit for my federal and California tax deduction in purchasing mortgage cost and future interest income and repair cost.
Submitted: 4 months ago.
Category: Tax
Expert:  Mark Taylor replied 4 months ago.

Hi, my name is Mark. I will be happy to help you with your questions.

Expert:  Mark Taylor replied 4 months ago.

What is your plan for the property? Is this going to be a rental?

Customer: replied 4 months ago.
Expert:  Mark Taylor replied 4 months ago.

You would be able to depreciate the property over 27.5 years. A portion of your purchase price would need to be allocated to land. Usually an 80% home 20% land split is used.

Expert:  Mark Taylor replied 4 months ago.

You would be able to deduction minor repairs. There is a safe harbor for repairs if the amount is below $2500.

Expert:  Mark Taylor replied 4 months ago.

Any major repairs or improvements would need to be capitalized and depreciated over 27.5 years.

Expert:  Mark Taylor replied 4 months ago.

You would be able to deduct the mortgage interest, property taxes, and other expenses related to the rental property.

Customer: replied 4 months ago.
mine land $792,238 improvements $311,235. How about the loan cost, is this non passive income for me as a real estate agent so the loan cost can be deductible. Can we switch to email***@******.*** and answer my question, I need to go to a meeting now.
Expert:  Mark Taylor replied 4 months ago.

Some of the loan costs would be deductible. Points. Others would be capitalized in the cost of the property.

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