What are the tax benefits of being a landlord?
May 16, 2008 7:05 AM   Subscribe

What are the tax benefits of being a landlord?

A couple of MeFi threads have mentioned that there are tax benefits to landlords. What are those? (U.S. federal taxes) (I know you're not my tax lawyer. I'm just looking for places to start my real investigation of the tax laws.) Thanks.
posted by Capri to Work & Money (7 answers total) 5 users marked this as a favorite
 
You can deduct a portion of your maintenance expenses as a business expense. (As long as they are either in a tenant unit or for the overall property-- there it's a percentage I believe.)

(IANAA, and I don't even do my own taxes, but I am a landlord.)
posted by miss tea at 7:43 AM on May 16, 2008


As a new landlord, I have found this book to be very helpful.

Also, if you take a loss on your expenses versus your rental income, you may be able to deduct most of it from your regular income.
posted by duckus at 7:50 AM on May 16, 2008 [1 favorite]


seconding the nolo book rec.

assuming you're going to be a live-in landlord:
check local laws -- my city (somerville, ma) provides a tax abatement for live-in landlords to discourage absentee landlords.

if you buy so much as a bolt for the house, save the recpt -- it's a business expense!

i know turbotax handles the "live-in landlord" case pretty well.
posted by rmd1023 at 9:06 AM on May 16, 2008


You can include depreciation of the property in your expenses (even if you don't live in the property). Depreciation must be "recaptured" upon sale of the property but claiming depreciation as an expense increases your losses for tax purposes (and thus offsets ordinary income for that tax year). Result is more money in your pocket now.
posted by QuantumMeruit at 9:52 AM on May 16, 2008


Response by poster: From OP: not going to be live-in. In fact, going to be managing from afar. Thanks for the advice.
posted by Capri at 11:02 AM on May 16, 2008


depreciation can also be rolled over on a section 1031 exchange.

also, you can write off any travel from your residence to the rental as business expenses, with the usual caveats of course.
posted by tachikaze at 11:37 AM on May 16, 2008


Not just maintenance but also capital improvements to the rental property can be deducted.
posted by nicwolff at 12:25 PM on May 16, 2008


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