Real Estate Law

Have real estate law questions? Ask a real estate lawyer.

Ask a Lawyer,
Get an Answer ASAP!

My wife and I are about to buy a second home. We plan to…

Customer Question
My wife and I...

My wife and I are about to buy a second home. We plan to rent it for short-term or long-term rental until we are closer to retirement, perhaps five years or so from now. For that period, we would like to declare it a rental property with all of the related deductions, however, we make more than $150k, so our deduction is limited to an amount that just offsets our income. Under these circumstances, does it make sense to declare it a rental home for tax purposes? Will we take a big hit on taxes if we convert it to a primary residence a few years from now? Would it be better to just rent it and pay taxes on the income, without declaring it a rental property? We are in the 37% federal tax bracket.

Lawyer's Assistant: What steps have you taken so far? Have you prepared or filed any paperwork?

Just a purchase contract. We are in the home inspection, etc., phase, with a closing date about three weeks from now.

Lawyer's Assistant: Where is the home located?

Heathsville, Virginia (a rural area on the Potomac River).

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

Not that I can think of.

Submitted: 24 days ago.Category: Real Estate Law
Show More
Show Less
Ask Your Own Real Estate Law Question
Customer reply replied 24 days ago
In case it makes a difference for your answer, the home is worth about $700k, we are paying about 75% in cash, we will pay off the mortgage in about two years. The property generated last year about $20k in short-term rental income, and could generate perhaps 1.5x to 2x that with a little more effort.
Answered in 1 day by:
5/26/2018
Real Estate Lawyer: WiseOwl58, Lawyer replied 22 days ago
WiseOwl58
WiseOwl58, Lawyer
Category: Real Estate Law
Satisfied Customers: 4,524
Experience: Experienced real estate lawyer and real estate broker.
Verified

Under these circumstances, you best move is just to pay taxes on the additional rental income but not declare it as a rental property for tax purposes. You can still take the deduction for your expenses.

Please rate five stars ***** by clicking on five stars ***** and press SEND.

A bonus is always appreciated after you rate.

Good luck to you. I wish you all the best.

Ask Your Own Real Estate Law Question
Was this answer helpful?
Ask WiseOwl58 Your Own Question
WiseOwl58
WiseOwl58
WiseOwl58, Lawyer
Category: Real Estate Law
Satisfied Customers: 4,524
4,524 Satisfied Customers
Experience: Experienced real estate lawyer and real estate broker.

WiseOwl58 is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises!

Gary B.Edmond, OK

My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer.

EricRedwood City, CA

I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight.

MichaelWichita, KS

PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent.

Three H.Houston, TX

Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!!

ElaineAtlanta, GA

It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem.

TonyApopka, FL

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

< Previous | Next >

Meet the Experts:

Tina

Tina

Lawyer

5,436 satisfied customers

17 years of legal experience including real estate law.

Barrister

Barrister

Lawyer

11,126 satisfied customers

17 years real estate, Realtor. Landlord 26 years

Infolawyer

Infolawyer

Lawyer

7,785 satisfied customers

Experienced lawyer

Ray

Ray

Lawyer

7,559 satisfied customers

Texas Attorney for 30 years dealing in real estate

LawTalk

LawTalk

Attorney

6,207 satisfied customers

I have 30 years legal experience. Additionally, in CA I held a Real Estate Broker's license.

Dimitry Esquire

Dimitry Esquire

Attorney

5,526 satisfied customers

JA Mentor, multiple jurisdictions, specialize in business/contract disputes, estate creation & admin

Ely

Ely

Counselor at Law

4,925 satisfied customers

Qualified attorney in private practice including business, family, criminal, and real estate issues.

< Previous | Next >

Related Real Estate Law Questions
We have a rental property in New Mexico that was managed by
Hello, we have a rental property in New Mexico that was managed by a property manager. We recently terminated that contract with them because of our intention to sell the house. At the same time, the … read more
Roy Hadavi
Roy Hadavi
Attorney
Juris Doctorate
1,223 satisfied customers
I just left a rental property after two years because six
I just left a rental property after two years because six months ago the water softener broke and the landlord never fixed it. The water pressure was weak and the showers constantly dripped. Do I have… read more
LegalGems
LegalGems
Juris Doctorate
12,219 satisfied customers
I have a rental property for sale. I was contacted via email
I have a rental property for sale. I was contacted via email by someone wanting to market my property for a lease option buyer. I signed a lease option agreement yesterday that came to me via email. I… read more
Infolawyer
Infolawyer
Lawyer
Doctoral Degree
7,785 satisfied customers
Can you do a 1031 exchange (rental property to rental
Can you do a 1031 exchange (rental property to rental property) and then eventually move in? is there a minimum time that the acquired property must remain a rental property before we can move into it… read more
N Cal Atty
N Cal Atty
Doctoral Degree
59 satisfied customers
I have a rental property. The tenant is behind on rent. They
I have a rental property. The tenant is behind on rent. They lease is in the boyfriend's name but he is in jail. The pregnant girlfriend is refusing to move. She is telling me that I cannot evict her … read more
LegalKnowledge
LegalKnowledge
Juris Doctor
30,154 satisfied customers
I'm interested in buying a rental property. I want it to be
Hello,I'm interested in buying a rental property. I want it to be under my LLC and have no tie to me personally. I'm assuming I'll need to use my personal credit to get the mortgage loan. If this is t… read more
TaxAttorneytoHelp
TaxAttorneytoHelp
Owner
Doctoral Degree
2,542 satisfied customers
I received a rental property as a gift. The tenant damaged
I received a rental property as a gift. The tenant damaged the property and i had to repair it. I did not haendve the money to do so. I asked my friend who gifted to me to pay for the repairs untill i… read more
Barrister
Barrister
Lawyer
Doctoral Degree
11,126 satisfied customers
Are landlords of rental properties required to provide
Are landlords of rental properties required to provide screens on windows? Our windows open, but there aren't any screens and mosquitoes and other nasty bugs always come in. We live in San Francisco.… read more
Roy Hadavi
Roy Hadavi
Attorney
Juris Doctorate
1,223 satisfied customers
I have a rental property in Orlando that is managed by a
Hello, I have a rental property in Orlando that is managed by a property management company. The HOA president informed me that the occupant of the property is a registered sex offender with multiple … read more
Infolawyer
Infolawyer
Lawyer
Doctoral Degree
7,785 satisfied customers
Selling a rental property. agreed to an offer, appraisal
selling a rental property. agreed to an offer, appraisal came in very low, buyer offered some cash to help. We agreed, signed documents, then got closing estimates. We were already underwater, cost to… read more
LegalKnowledge
LegalKnowledge
Juris Doctor
30,154 satisfied customers
In nov of 2000 I purchased a rental property. The seller
In nov of 2000 I purchased a rental property . The seller carried a 2nd mortgage as part of financing . I made payments to him monthly and in 2004 I paid him off, and he sent me a release of Lein. So,… read more
Barrister
Barrister
Lawyer
Doctoral Degree
11,126 satisfied customers
I am the PR for an estate with a rental property. The person
Hi I am the PR for an estate with a rental property. The person who passed away had a will that had to go through probate death. He passed away July 2017. Due to delays with the probate I didnt have a… read more
Ray
Ray
Lawyer
Doctoral Degree
7,559 satisfied customers
If a home buyer did not request a home inspection, is the
If a home buyer did not request a home inspection, is the seller responsible … read more
Barrister
Barrister
Lawyer
Doctoral Degree
11,126 satisfied customers
What home inspection items and repairs qualify for the
What home inspection items and repairs qualify for the estate to pay when one sibling "buys" the other sibling's share of the house? Buy is in quotations because the estate will be distributed, with o… read more
Lori
Lori
Juris Doctor
1,547 satisfied customers
I was in the process of short selling my rental property.
I was in the process of short selling my rental property. Short story is the appraised value of the house is $100k. I have two mortgages from 2007. 1st is $111,000. 2nd is $81k. I have two offers. $10… read more
TaxAttorneytoHelp
TaxAttorneytoHelp
Owner
Doctoral Degree
2,542 satisfied customers
Capital gains tax on sale of rental property. Are the
Capital gains tax on sale of rental property. Are the capital gains rates based on what you paid for property verses what you sold it for? … read more
Ray
Ray
Lawyer
Doctoral Degree
7,559 satisfied customers
We have a second home that was originally a rental property.
we have a second home that was originally a rental property. owe way more than it's worth. We had a settlement with the mortgage company and we were going to pay that and then they sold the mortgage. … read more
Gerald, Esq
Gerald, Esq
Juris Doctor
3,894 satisfied customers
We have a rental property that was attached to our current
we have a rental property that was attached to our current homes mortgage when we fell behind on it. We filed chapter 13 in 2015 and current with payments. Wells fargo is the home mortgage and First N… read more
DrakeLAW
DrakeLAW
Juris Doctorate
1,038 satisfied customers

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

Show MoreShow Less

Ask Your Question

x