Have a Tax Question? Ask a Tax Expert
Hi, my name is Mark. I will be happy to help you with your questions.
What is your plan for the property? Is this going to be a rental?
You would be able to depreciate the property over 27.5 years. A portion of your purchase price would need to be allocated to land. Usually an 80% home 20% land split is used.
You would be able to deduction minor repairs. There is a safe harbor for repairs if the amount is below $2500.
Any major repairs or improvements would need to be capitalized and depreciated over 27.5 years.
You would be able to deduct the mortgage interest, property taxes, and other expenses related to the rental property.
Some of the loan costs would be deductible. Points. Others would be capitalized in the cost of the property.