Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax
This answer was rated:

1999 Bought duplex in small HOA governed community in Wheat

Ridge, CO. Lived there until...
1999 Bought duplex in small HOA governed community in Wheat Ridge, CO. Lived there until remarried and eventually moved out to brand new home in 2007. Left daughter, boyfriend to "place-hold". Market was too bad to sell at the time. Since then my kids and 2 other 20-somethings have lived here, paying only enough to cover my mortgage payment, I pd HOA, utilities, phone, tv, internet, property tax,etc. The deal was never to make a profit, but simply to hold house until market improved. Tried to do my own taxes last year and owed $5000 due to limits on what I could "lose". This isn't a business - I read somewhere that if house "rental" not meant for profit, different tax laws/rules applied. I need to not owe money on this "money pit". Advise, IRS references please.
Show More
Show Less
Ask Your Own Tax Question
Answered in 9 hours by:
4/2/2010
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 16,205
Experience: 15years with H & R Block. Divisional leader, Instructor
Verified

Hello and thank you for using Just Answer.

There are different rules for Not for Profit Rental and Personal Use Rental.

You are considered to use a dwelling unit as a home if you use it for personal purposes during the tax year for more than the greater of: 14 days or 10% of the total days it is rented to others at a fair rental price.

A day of personal use of a dwelling unit is any day that it is used by:

  1. You or any other person who has an interest in it, unless you rent your interest to another owner as his or her main home under a shared equity financing agreement;
  2. A member of your family or of a family of any other person who has an interest in it, unless the family member uses it as his or her main home and pays a fair rental price;
  3. Anyone under an agreement that lets you use some other dwelling unit; or
  4. Anyone at less than fair rental price.

Numbers 2 & 4 above hit right at your situation. You have family members and others living in the property that you are not collecting a Fair Rental Price from on their use of the property.

You will not be able to deduct your rental expense in excess of your gross rental income. If you itemize your deductions on Form 1040, Schedule A, you may still be able to deduct mortgage interest, property taxes, and casualty losses on that schedule. As far as the expenses go you can only subtract from the rent that is paid you for their use of the property. This means that you may not show a loss against other income. The additional interest and taxes that you pay on this property will increase your Schedule A itemizing. If you are deducting what you are allowed and you are collecting the mortgage at least from the parties using your property then you should not be seeing a tax increase form the property but you will not see the use of it reducing any other income you have as a rental loss either.

 

I sincerely XXXXX XXXXX could advise you differently,

 

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 16,205
Experience: 15years with H & R Block. Divisional leader, Instructor
Verified
Robin D. and 87 other Tax Specialists are ready to help you
Ask your own question now
Customer reply replied 7 years ago

Just to clarify - I did not use Schedule A to show the mortgage interest, or property taxes last year - I was using schedule C - since this really isn't a business, should I be using schedule C or just A?

Hello,

You need to how the interest paid and taxes on Schedule A.

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 16,205
Experience: 15years with H & R Block. Divisional leader, Instructor
Verified
Robin D. and 87 other Tax Specialists are ready to help you
Ask your own question now
Ask Robin D. Your Own Question
Robin D.
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 16,205
16,205 Satisfied Customers
Experience: 15years with H & R Block. Divisional leader, Instructor

Robin D. 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

4,338 satisfied customers

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

Robin D.

Robin D.

Senior Tax Advisor 4

16,205 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
As per the new tax law, the property tax deductions of 10000
As per the new tax law, the property tax deductions of 10000 is it per property or per tax payer per property?If both wife and husband file together can they claim 20000 towards one property or just 1… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I want form 1040 along with schedule A for years 2016 and
I want form 1040 along with schedule A for years 2016 and 2017 - NOTB eFile, just the old fashion forms that I complete with a pen,p. … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,777 satisfied customers
Under the new Tax Cuts and Jobs Act, does a Schedule C sole
Under the new Tax Cuts and Jobs Act, does a Schedule C sole proprietor qualify for the 20% deduction of qualified business income or is this only available to S Corp shareholders & LLC's?… read more
Patrick Mullis
Patrick Mullis
Masters
17 satisfied customers
Lev we spoke on the phone regarding the amended schedule c
Lev we spoke on the phone regarding the amended schedule c questionnaire. When I do my schedule c business again, will I use the schedule C form 2017?I am assuming that is correct, the C4 questionnair… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
The 2018 tax law will allow homeowners to deduct property
The 2018 tax law will allow homeowners to deduct property taxes and either income or sales taxes with a combined limit on these deductions being limited to no more than $10,000. What does this mean? w… read more
Robin D.
Robin D.
Senior Tax Advisor 4
16,205 satisfied customers
A law firm (which is a Schedule C filer) has gross income of
A law firm (which is a Schedule C filer) has gross income of 1,000,000 & Net Income 0f 280,000. In the tax reform just passed, there is a 20% deduction for law firms that have income less than 315,000… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,061 satisfied customers
Chad, I have a Schedule C realtor that turn 70 August of
Chad,I have a Schedule C realtor that turn 70 August of 2017. She will have earned income from her Schedule C. Is she allowed to contribute to a Traditional IRA and/or SEP IRA for 2017? If she has sel… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Under the new tax plan, can a Schedule C proprietor still
Under the new tax plan, can a Schedule C proprietor still deduct her health insurance premiums on page 1 of Form 1040 & are there any medical expenses she can still deduct on Schedule A (if they excee… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,061 satisfied customers
On a schedule c who do you put as the proprietor if it is a
on a schedule c who do you put as the proprietor if it is a newspaper route and you are given a 1099-misc … read more
James Daloisio
James Daloisio
Attorney
Doctoral Degree
79 satisfied customers
A dentist sells his Schedule C dental practice for 190,000
A dentist sells his Schedule C dental practice for 190,000 in 2016. Please note he began the practice in 1998. Additionally, please note he filed a joint return with his wife in 2016. The 190,000 was … read more
taxmanrog
taxmanrog
Master\u0027s Degree
767 satisfied customers
Is the interest one pays on a personal loan a tax deduction?
Is the interest one pays on a personal loan a tax deduction? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,777 satisfied customers
Can we claim the mortgage interest for a second home on
Can we claim the mortgage interest for a second home on property that we purchased and have developed a rustic "camp" on? We have an outhouse (bathroom), outdoor kitchen area, and a small building we … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,777 satisfied customers
Form 886-A Deductible Home Mortgage Interest Taxpayer has
Form 886-A Deductible Home Mortgage Interest Taxpayer has $1,000,000 in Grandfathered debt. Line 9 Form 886-A - is this line amount after deducting the garandfathered debt… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I entered my mortgage interest in the section marked
I entered my mortgage interest in the section marked mortgage. … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I am a personal injury attorney doing a schedule c as we
I am a personal injury attorney doing a schedule c as we speak. . … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Small schedule c business donates fully depreciated
small schedule c business donates fully depreciated furniture to charity. They've been told that the FMV is $1,000. What is the deduction for contributed property? … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Regarding the 'capitalize the mortgage interest'. I was a
Regarding the 'capitalize the mortgage interest'. I was a partner in a rehabbing/flipping real estate business. We rehabbed two properties in 2016 and sold them in 2017. According to the first propert… read more
taxmanrog
taxmanrog
Master\u0027s Degree
767 satisfied customers
A taxpayer, Form 1040 Schedule C, is on the cash basis. The
A taxpayer, Form 1040 Schedule C, is on the cash basis. The average revenue for the last 5 years is $5,100,000. There is no inventory. The NAICS is 423600Can he remain on the cash basis?… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 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