Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax

If I buy an investment home, what can I claim tax wise?

Customer Question
If I buy an investment home, what can I claim tax wise?
Submitted: 4 years ago.Category: Tax
Ask Your Own Tax Question
Answered in 4 minutes by:
10/3/2013
Tax Professional: Lev, Tax Advisor replied 4 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,159
Experience: Taxes, Immigration, Labor Relations
Verified

Lev :

Hi and welcome to our site!
When the property is purchased - generally - that is not a taxable transaction. However - you establish the basis - that is your purchase price and purchase expenses. When the property is sold - that basis will be used to calculate your taxable gain.
Your gain (or loss) would be equal to (selling price) MINUS (adjusted basis).

Lev :

Now - if that property will be used as rental - you will receive a rental income and will deduct your rental expenses.
You generally cannot deduct in one year the entire cost of property you purchased, instead, you can depreciate it. hat is, you can recover the cost over a number of years by deducting a part of the cost each year. A residential rental property is depreciated over 27.5 years.

Ask Your Own Tax Question
Tax Professional: Lev, Tax Advisor replied 4 years ago
Just in case you were not able to use the chat - I am switching to Q&A mode and posting the answer below.
Please feel free to communicate if you need any clarification or have other tax related issues.

When the property is purchased - generally - that is not a taxable transaction. However - you establish the basis - that is your purchase price and purchase expenses. When the property is sold - that basis will be used to calculate your taxable gain.
Your gain (or loss) would be equal to (selling price) MINUS (adjusted basis).
Now - if that property will be used as rental - you will receive a rental income and will deduct your rental expenses.
You generally cannot deduct in one year the entire cost of property you purchased, instead, you can depreciate it. hat is, you can recover the cost over a number of years by deducting a part of the cost each year. A residential rental property is depreciated over 27.5 years.
Ask Your Own Tax Question
Ask Lev Your Own Question
Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,159
30,159 Satisfied Customers
Experience: Taxes, Immigration, Labor Relations

Lev 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
Form 8300. We are doing a business to business transaction.
We are doing a business to business transaction. The form is not clear on how to compete. Do we complete Part I f … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Can I report rental income in my tax return on a property
Can I report rental income in my tax return on a property thar is owned by my father? He does not live in the US is not a US citizen and can sign a document to allow me to receive the rental… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
Purchased investment property for 127,000 of which 80,000
Purchased investment property for 127,000 of which 80,000 was from 1031 from estate from a death of mom in 1991. Purchase was in 2003. Put 30,000 in improvements to property. Selling that property in … read more
Lev
Lev
Tax Advisor
30,159 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
Tax Advisor
30,159 satisfied customers
Today I have a question about Property Taxes: We are in
Second opinion] Hello and Good Morning! Today I have a question about Property Taxes: We are in process to buy a Mobile Home. Purchase price is $137.500.- Escrow will close on October 24th or 25th. Th… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Can individual take residential rental property losses on
Can individual take residential rental property losses on their tax returns … read more
abci168
abci168
Principal
27 satisfied customers
If I buy a commercial + residential rental income property
If I buy a commercial + residential rental income property worth $1.2M in TEA. I will put in 250k in down payments and gradually invest $150k via mortgage payments and $100 for the salaries of the sta… read more
abci168
abci168
Principal
27 satisfied customers
Wife owns property individual, picks up rental income on
wife owns property individual, picks up rental income on Sched E - husband and wife live together in another home. Wife wants to rent husband the house for his business - both Sched C - does this make… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
How can I record a S corp buyout transaction(sole owner) on
How can I record a S corp buyout transaction(sole owner) on stock sale? Should I record Treasury Stock / Cash for outgoing owner then Cash / Treasury Stock for new owner's transaction?… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Second opinion] I have residential rental properties but am
Second opinion] I have residential rental properties but am not a Real Estate Professional. I have a separate purchased garage property used for storage of equipment used in the rentals. How and what … read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
I have residential rental properties but am not a Real
I have residential rental properties but am not a Real Estate Professional. I have a separate purchased garage property used for storage of equipment used in the rentals. How and what can I expense on… read more
Lev
Lev
Tax Advisor
30,159 satisfied customers
Trust has one asset- a residential rental property. Property
Trust has one asset- a residential rental property. Property was sold in 2016. The Trust has $34,323.00 of unrecaptured 1250 gain. The maximum tax rate is 25%. The Trust has $3511.00 of Long Term capi… read more
Lev
Lev
Tax Advisor
30,159 satisfied customers
1031 exchange land for residential rental property. How to
1031 exchange land for residential rental property. How to allocate basis for rental property between land and depreciable building. I assume depreciation will be for residential property.… read more
Lev
Lev
Tax Advisor
30,159 satisfied customers
I am unclear regarding my residential rental property
I am unclear regarding my residential rental property "basis" for depreciation. We converted it in 2013 to rental and is the basis our purchase price in 1989 or the value in 2013. Previous year I used… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
Income property tax deduction California question we are
income property tax deduction California question we are thinking of buying Townhome and renting it out wanted to find out more about tax deduction can me deduct the loan amount not just the interest?… read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
I am doing a 1031 Exchange of residential Rental Properties.
I am doing a 1031 Exchange of residential Rental Properties. I sold a 4 plex and the proceeds received was about $223,400. Our exchanger has these proceeds. We are thinking of a similar property for l… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
A couple purchases a residential rental property which cost
A couple purchases a residential rental property which cost 250,000. They allocate 25,000 (10%) to land, leaving a depreciable basis of 225,000. They deduct 75,000 of depreciation on Schedule E betwee… read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
I sold a residential rental property in 2015. I need help
Hello, I sold a residential rental property in 2015. I need help understanding how to complete lines 9 and 17 on IRS Form 6251. These lines ask me to compute the difference between the regular taxable… read more
Dr. Fiona Chen
Dr. Fiona Chen
President
Ph.D.
481 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