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SVTPerformance's Chain of Restaurants
Road Side Pub
HAVE to rent my house out... Advice? What am I getting in to?
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<blockquote data-quote="Longhornd00d" data-source="post: 13850983" data-attributes="member: 18170"><p>In the case of rental properties, the mortgage proceeds are used to purchase an asset, the house. You didn't recognize income when you received the loan proceeds. The house will be considered converted from personal use to residential rental property. The way you will be handling it it will be considered passive income, so you cannot create a loss to offset other income. The loss will be suspended and offset against future passive income.</p><p></p><p>You report all of the rental income on Schedule E. You will have your gross income. From that, you will be able to deduct several expenses: management fees, mortgage interest, repairs and maintenance, etc. Look at Schedule E and you will see what is there. This is how you recover the cost of your income.</p><p></p><p>On top of that, you will have depreciation expense (Line 18). You will depreciate the property via MACRS, generally over a period of 27.5 years. And just know, you will have to recognize a gain (or loss) on the house when you sell it since it will now be considered business property.</p></blockquote><p></p>
[QUOTE="Longhornd00d, post: 13850983, member: 18170"] In the case of rental properties, the mortgage proceeds are used to purchase an asset, the house. You didn't recognize income when you received the loan proceeds. The house will be considered converted from personal use to residential rental property. The way you will be handling it it will be considered passive income, so you cannot create a loss to offset other income. The loss will be suspended and offset against future passive income. You report all of the rental income on Schedule E. You will have your gross income. From that, you will be able to deduct several expenses: management fees, mortgage interest, repairs and maintenance, etc. Look at Schedule E and you will see what is there. This is how you recover the cost of your income. On top of that, you will have depreciation expense (Line 18). You will depreciate the property via MACRS, generally over a period of 27.5 years. And just know, you will have to recognize a gain (or loss) on the house when you sell it since it will now be considered business property. [/QUOTE]
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SVTPerformance's Chain of Restaurants
Road Side Pub
HAVE to rent my house out... Advice? What am I getting in to?
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