Mortgage TAX

April 12, 2006 4:39 PM

Last Min. Tax Question. Please help

It has been a long time since I did my own return.
But I have ran out of time and want to learn more in detail about how things are turning around in my financial situation. (my tax guy only confused me more...)
(lets not argue about if it is better deal to just turn it all to professionals... i am here to learn)

I purchased TurboTax Delux and State...
I am a average single JOE. no particular side earnings nor spending.
I am a full time employee in a corporation. I get less than $99,000 a year gross pay. I think I am in 28% TAX bracket.
I purchased $300,000 home while not being able to sell my old $50,000 condo in 2005.
I still have the old condo. I am still paying for both mortgages, association dues, and utility bills. The condo is in the For Sale and/or Lease listings.

What can I do with this? So far I have filled in 1st and 2nd home blanks in the TurboTax....
Should I have recorded my old empty condo as a rental property even though it has not been rented at all (i am still trying)

Can I be able to record old condo as business loss??? get back some mortgage payments and $1500 worth of improvements??

Which is better?

What else can i deduct other than both interests and taxes paid to city??

Please as detail as possible... I need OVER-INFO on this... I have read up on many tax tips on the net... but please give more.. any more tips... more tips...

Thank you for all your help...

posted by curiousleo to home & garden (7 comments total)

Another thing...
I have claimed 100% on my laptop as a business expense not reimbursed.... $2400

I only use the laptop for work related and my own investing related stuff.... There are no personal pictures or games on the laptop.. the laptop spends about 8hours a day at work and rest of time just sitting on my desk at home..

company never required me to buy the laptop... but i did it anyways... but i do a lot of CAD stuff on it at work and home with it

that is deductible right? any down falls?
posted by curiousleo at 4:48 PM on April 12, 2006

It's never too late to talk to a professional tax advisor. They're open late these days and your situation is simpler than many. Asking for tax advice on the net is one of those probably-not-advisable things you always hear about.
posted by felix at 4:54 PM on April 12, 2006

felix... you are probably right...
I think TurboTax gives me 1 free pro tax advisor ....
I would like to find out as much as possible before i talk to them...

Thanks for the advise..

:-)
posted by curiousleo at 4:58 PM on April 12, 2006

curiousleo, yea, go with felix' suggestion. It would be very helpful to you especially concerning your two mortages. You should get a very healthy return, but if not done right you could get screwed. Forgive my cheesiness, I don't usually promote things on anything Meta, but these folks have been helping me out for a few years now.

When I first used their service they went back five years into my tax history and earned me about 8 grand. They always give me free advice regarding property, stockholdings etc.
posted by snsranch at 5:19 PM on April 12, 2006

I am pretty sure that if you are salaried employee and you purchased the laptop on your own accord, then you can't write it off. Even if you could, it would be depreciated over 5 years so it would only bring your income down like $500 this year.

The second condo is an interesting case, I'm fairly sure you can write off all expenses on it as a rental loss.

Get some professional advice. This stuff is complex. H and R Block or Liberty sits down with you, discusses it all thoroughly, and gets whatever you can get for you.
posted by visual mechanic at 8:55 PM on April 12, 2006

I would file an extension and make an appt. next week to meet with a tax accountant (if you don't have one now, you won't get in before the deadline - if you do, they are going to seriously overcharge you).

Laptop - you can depreciate that on Form 2106 - Employee Business Expenses - it will carry through to your Schedule A once you are over 2% of your adjusted gross income.

Condo - it wouldn't be a business (Schedule C), it would be a Rental (Schedule E).

Extra deductions - license plate renewal (personal property taxes), charitable contributions (cash and non-cash), certain closing costs on the new house (taxes paid at closing - take your closing statement with you to your tax appt), etc.

Check out the Schedule A and Form 2106 instructions for more hints.
posted by blackkar at 6:54 AM on April 13, 2006

Careful about writing off the condo as a rental. You could be playing with depreciation schedules, and you could affect your capital gains exemption should you be able to sell it. (I think that once the condo becomes a 'rental' it is no longer your former residence)
posted by Gungho at 7:28 AM on April 13, 2006