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I would like clarification on the IRS tax deductions and a…

I would like clarification...

I would like clarification on the IRS tax deductions and a rental property I purchased recently.

Accountant's Assistant: What state is the property located in? And has anyone consulted a local attorney about this?

Ohio. No

Accountant's Assistant: What are the terms of the lease? Any issues related to maintenance or upkeep?

I would like to know when the property can be considered a rental property for tax deduction purposes. And how personal use of the home affects tax deductions.

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

What are the charges to speak to the attorney?

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Answered in 15 minutes by:
8/4/2017
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 18,061
Experience: 15years with H & R Block. Divisional leader, Instructor
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Hello, I'm Robin. Welcome to JustAnswer. I'm reviewing your question now and typing up my reply. I'll post that in just a few moments.

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A property is considered rental use when you make it available for rental to the public. In most cases, you must include in your gross income all amounts you receive as rent. Rental income is any payment you receive for the use or occupation of property. It is not limited to amounts you receive as normal rental payments.

If you also use the property for personal use you prorate the expenses between the personal and the rental.

Please let me know if you need more information. Ask a specific question.
If not then scroll up to see the STARS to rate so I am credited.

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Customer reply replied 10 months ago
I have related to this statement: "A property is considered rental use when you make it available for rental to the public." The property that I am intending to use for rental is a condo. At this time, due to HOA rules, I'm not allowed to rent it out because the association requires there be 50% owner occupants and 50% renter ratio. In the meantime, I have placed my name on a waiting list the association has so that I can rent it out. Also, I'm working on making improvements to the property to get it ready to rent. It is currently vacant. Can it be considered a rental property?

Not yet, not for reporting any rental use on Schedule E that is. You will add all the costs you have to the cost of the condo. In the year that you actual have it advertised for rent then you can file a Schedule E and report the condo as rental property. It is then that you can start to depreciate the property as well.

If you are not staying n the condo at all then it is investment property. If you are using the condo it is a second home for you.

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Until the condo is available for renters and advertised (in some way) it is not rental property yet.

Please let me know if you need more information.
If not then scroll up to see the STARS to rate so I am credited.

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 18,061
Experience: 15years with H & R Block. Divisional leader, Instructor
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Chad EA, CFP ®
Chad EA, CFP ®, IRS Enrolled Agent, CFP(R),
Category: Tax
Satisfied Customers: 2,395
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Customer reply replied 10 months ago
Thank you. Until it is actually rented out it is not considered a rental property but an investment property. Until it's rented out I may go there one to two times any one point (no more than a couple of days). For purposes of taxes, as long as it's not advertised as a rental there are no tax deductions to be taken until it is advertised? Or can you deduct investment property amounts from taxes? I should keep a collection of all the charges I'm paying right now to improve the property and when I can rent it out then I can claim it as a rental property?

Until it is actually rented out it is not considered a rental property but an investment property. CORRECT

Until it's rented out I may go there one to two times any one point (no more than a couple of days).CORRECT

For purposes of taxes, as long as it's not advertised as a rental there are no tax deductions to be taken until it is advertised? CORRECT

Or can you deduct investment property amounts from taxes? Investments expenses require investment income to be deductible

I should keep a collection of all the charges I'm paying right now to improve the property and when I can rent it out then I can claim it as a rental property? CORRECT

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