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Welcome to the AAOA Forum, where we discuss the the topics our members want to hear and want to talk about. We like to take an active roll in the online community to help our members learn and help educate landlords new and old. We encourage you to participate and join in our discussions. Thanks.
Crucial Tax Tips for Landlords
Tip #3: Spread Out Repairs
by Sandra Prieto
It may be wise to spread out your repairs so they don’t get confused with improvements. Remember that repairs get deducted and improvements are depreciated.
Be careful to make a clear distinction between the two, especially if you prefer to immediately deduct the expense of your repairs.
Certain repairs and improvements may appear to be connected and part of the same overall improvement program.
For example, say you want to sell your rental soon, so you repair the broken floor in the kitchen, and also replace the windows (during the same week). Although the repair and improvement are not connected, the IRS may feel that they are part of the same overall improvement to your property.
Even though you should be able to deduct the cost of your repairs, just be sure to keep two separate bills for the jobs. To safeguard your deductions, you may consider spreading your repairs over time so they are not lumped together as overall improvements.
With this knowledge, you should take the extra precautions. It may save you from audits and headaches in the future.
For more Tax Tips and Tax Saving Web Tools like DepreciateEm.com and DeferEm.com, check out TReXGlobal.com.
Click here if you missed Home Office Deduction.
Did you miss Use Depreciation to Lower Income?
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Filed under: AAOA Forum, tax tips
Loved it. Great for my investors & myself.
Thank you.
Mukami
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