Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax

Hi. I am a real estate professional with three properties under

Customer Question
development (rental, remodel, etc) and...
Hi. I am a real estate professional with three properties under development (rental, remodel, etc) and I want to know if I file a schedule c for my company (shetland real estate) or just schedule E for each of the properties. I want to be able to take business deductions as well as the standard property deductions.
Submitted: 8 years ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 2 hours by:
9/3/2009
Tax Professional: RD, Certified Public Accountant (CPA) replied 8 years ago
RD
RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8,784
Experience: CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
Verified
Your tax accountant is right. All the expenses related to the property remodelling will be capitalized to the cost of the property. When you sell the property - you will expense that as part of the cost of the property.

For rental property- you will capitalize the expense and depreciate the property reporting it on Sch E.

Routine operational expense not related to remodeling of the property such office expense, utilties, admin staff etc can be expensed on Sch C.

Let me know if you have any question.

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.
Ask Your Own Tax Question
Customer reply replied 8 years ago
thanks so much. that was really helpful. I just have one other point of clarification. I did not accept your fee yet, as i thought that might have ended the session, but i certainly will do it. does my acceptance create an end of our session? I have never used this before.

So here is the other question. My tax accountant says that if I file a "c" with no "profit" as the "profit" will all be on "e" that it will be a tip off to the IRS for audit. Similarly, if i file for any home office expense, that will also be a tip off and that will trigger an audit. I see his point as the "C" expenses do appear to be "pass through". In 2008 for instance, i had one rental property (creating income on e) and two alternate properties that i was "developing", looking at, researching, getting ready to buy. Ultimately, I did buy in 2009.

Also, can you address my other question on my first set of questions, which was "on schedule c, i must identify my business in a category on line A, which is a code. The code I think that i would put is 531390, which is in the real estate category: Other activities related to real estate. I am leasing some properties and developing others.

Ok, so i think that is it and i will definitely pay your fee. thanks for your help. Is there every a way i could initiate another session and get back to you? thanks. thayer
Tax Professional: RD, Certified Public Accountant (CPA) replied 8 years ago
Acceptance does not end the session. You can ask any question or clarification you may need.

On Sch E- the rental income will be reported. Any gain or loss on sale of the property will be reported on Sch C when you sell the property for profit. Expenses related to rental property will be reported on Sch E and related to other activity on Sch C. Loss on Sch C for a year or 2 will not trigger an audit if the expenses are incurred in ordinary course of business and not of the nature that needs to be capitalized with cost of the property that you are developing. You will not be able to claim home office expense until you have profit on Sch C. The home office expense will be carried forward.

The code you mentioned on Sch C is right.

You can initiate other session and request me on the post as FOR RD.

Let me know if you have any question.

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

Ask Your Own Tax Question
Ask RD Your Own Question
RD
RD
RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8,784
8,784 Satisfied Customers
Experience: CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..

RD 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:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

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

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,310 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,695 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
I bought a rental property for 49000 and sold it for 29000
I bought a rental property for 49000 and sold it for 29000 many years later. During those years I depreciated it entirely. So do I it don't I have to pay capital gain on the entire 29000? … read more
abci168
abci168
Principal
27 satisfied customers
How to report cancellation of debt on rental property?
I received a 1099-C for my rental property that I held for over 1 year. According to the worksheet provided in IRS Publication 4681 I was insolvent just prior to the debt being canceled. My question i… read more
Dr Arthur Rubin
Dr Arthur Rubin
Doctoral Degree
24 satisfied customers
My question is about depreciation for rental property. My
Hello. My question is about depreciation for rental property. My rental property had no income during one year. In this case, since there was no income, I do not need to claim depreciation for that sa… read more
Fred Rook
Fred Rook
Corporate Controller
BSBA
31 satisfied customers
I got a 1099 A of a rental property with information on Box
I got a 1099 A of a rental property with information on Box 2 and Box 4 how do I report it on my tax… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I have a rental property that required major repairs this
I have a rental property that required major repairs this year. The repairs minus deductible were covered by my insurance. Is the entire amount of repair an allowable expense or only the insurance ded… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Would owning a second home that is used for rental property
Would owning a second home that is used for rental property income affect VA survivors benefits? Would SSDI income?… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,463 satisfied customers
Are you familiar with Capital Gain taxes on rental property?
Are you familiar with Capital Gain taxes on rental property? … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I recently received a car as a payment for rental property
Hi, I recently received a car as a payment for rental property and I was wondering how the tax treatment would be … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
I sold a rental property at a loss (no capital gains);
I sold a rental property at a loss (no capital gains); however should I pay the $133,000 on the principal of my house I owe 166,000 at 2.8% or buy another rental? … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
If my Schedule E loss is disallowed for a rental property
If my Schedule E loss is disallowed for a rental property (due to income level), can I take the mortgage interest and real estate taxes paid on Schedule A instead of on Schedule E?The entire expense a… read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
723 satisfied customers
Disposition of Rental Property. Rental property: Gross sale
Disposition of Rental Property.Rental property : Gross sale price: $600K Cost or Other Basis plus Selling Expenses: $300K Depreciation allowed or allowable: $100K (Form 4797 line 22)Adjustment: $300K … read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
In Texas A & single females have several rental properties
In Texas A & B single females have several rental properties in joint tentancy with right of survivorship. The 1099 is under A's SSN. In 2015 rental income was filed under B's federal tax. IRS now all… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
I bought a new rental property. Can I get any tax deductions
I bought a new rental property. Can I get any tax deductions for the money I spend to buy the property? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,463 satisfied customers
We are considering purchasing a rental property in Cape. My
we are considering purchasing a rental property in Cape Cod. My understanding to get the full tax advantage I am only allowed to stay in the property for 14 days. Is this the case even when the rental… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I own rental properties. If I purchased the property in
I own rental properties. If I purchased the property in early 2016, but haven't finished the remodel are marketed it for rental yet (because it's not ready for rental), do I list the property on my 20… read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
723 satisfied customers
Summary: I did receive IRS audit for un-reported income for
Summary: I did receive IRS audit for un-reported income for year 2014. Details: my brother did taxi service and I did open square up merchant account so he can charge his customers using credit cards … read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,217 satisfied customers
I was audited on my schedule C and the deductions that were
i was audited on my schedule C and the deductions that were claimed for 2014 & 2015, the letter states if i don't respond to the letter , the IRS will issue an examination report showing additional ta… read more
Rick Martin
Rick Martin
MBA
92 satisfied customers
I have a rental property which is reported on Schedule E
I have a rental property which is reported on Schedule E (and not Schedule C). I paid more than $600 to a contractor for repairs in 2016. Do I need to issue a 1099-MISC to the contractor? I read on Tu… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x