Crucial Tax Tips for Landlords, #10

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Deduct Losses Even If No Expenses

Ten dollar bills Losses incurred because of a casualty, disaster, or theft may be tax-deductible. A casualty is a loss of property (including damage and destruction) due to a sudden event that is identifiable, unexpected, and unusual. These losses may be limited, but they are deductible as a rental activity expense.

For example, your tenant runs their car through the garage door. Even though you haven’t replaced the garage door and don’t have any expenses because you didn’t fix anything, you can deduct the cost of damages incurred as a casualty expense.

Casualty losses on rental property are reported on Schedule A from IRS Form 4684, and are not subject to the 2% AGI limitation or $100 deduction.

Everyone’s tax situation is different, and this information should not substitute professional advice. Taxpayers should always consult with their tax advisors to consider specific factors that might affect their situation.

For more Tax Tips and FREE Property Management Software for real estate investors, check out TReXGlobal.com.

Did you miss these tax tips:

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Sell Property To Yourself

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Posted on Monday, January 19th, 2009 at 9:35 am and is filed under AAOA Forum. You can follow any responses to this entry through the RSS 2.0 feed.

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5 Responses to “Crucial Tax Tips for Landlords, #10”

MasterPlan Capital LLC says:

January 21, 2009 at 8:15 am

Sound advice. Thanks. I’m going to link to this on
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