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Mark Taylor
Mark Taylor, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 2283
Experience:  Certified Public Accountant
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I owned a condo for 3 years now in Carlsbad, CA and I would

Customer Question

I owned a condo for 3 years now in Carlsbad, CA and I would like to rent it out so that I can save some money by doing so and renting a room for myself. I would like to know what the tax consequences would be, and if it would actually same me money.
JA: The Accountant will know how to help. Is there anything else important you think the Accountant should know?
Customer: I own a condo for 3 years now in Carlsbad, CA and I would like to rent it out so that I can save some money by doing so and renting a room for myself. I would like to know what the tax consequences would be, and if it would actually same me money.
Submitted: 8 months ago.
Category: Finance
Expert:  Mark Taylor replied 8 months ago.

Hi, my name is Mark. I will be happy to help you with your questions. It sounds like you would be renting a room in your condo?

Customer: replied 8 months ago.
Hi Mark,
No, I guess I wasn't clear. I would be renting a room elsewhere. I was hoping that I could use the money from the condo rent to pay my mortgage but what would be the tax consequences? Would I be able to save money or not?
Expert:  Mark Taylor replied 8 months ago.

I am sorry I did not quite understand. Thank you for clarifying this. If you rent your condo you would be able to deduct the expenses associated with the rental property. These expenses include property taxes, mortgage interest, repairs etc. You would also be able to depreciate the property. A residential property is depreciated over 27.5 years. You would offset your expenses against the rental income that you receive. This information would be reported on Schedule E. If you have a loss you may or may not receive a current benefit. The amount of rental loss that you can claim each year is limited to $25,000. If you have a loss in excess of this it would be carried forward to the next year. This is an income threshold the could reduce the available loss. The amount of rental loss becomes limited once your income reaches $50,000 ($100,000 for a married filing jointly). The available loss is eliminated when your Adjusted Gross income reaches $75,000 ($150,000 is married filing jointly). You do not lose the loss, it is just that the loss is suspended and carryforward. The loss could be used in future years if your income changes or would be utilized when you sell the property.

Expert:  Mark Taylor replied 8 months ago.

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