STATUS : RENTED

3 Bedroom 1 1/2  Bath  1200 Square foot Home for Lease
Great Family Neighborhood in San Bernardino
This home has beautiful hard wood floors
And new paint throughout.
Indoor washer/dryer hook ups
Large backyard with covered patio
2 car garage w/ opener
Pets Welcome

Click here for more information and photos.

With money as tight as it is these days it is important to squeeze every tax savings dollar out of your rental property you can. Many landlords do not take full advantage of all of the tax deductions available to them because they are not aware of them.

One of the joys of owning rental property is the great tax benefits. The tax benefits could be the difference between losing money and earning a profit on a rental property. I have put together a list of the top ten tax deductions for landlords of small residential rental property:

1. Interest. The landlord’s single biggest tax deduction is interest. Examples of interest that can be deducted are mortgage interest payments on loans used to acquire or improve rental property and interest on credit cards for goods or services used in a rental activity.

2. Depreciation. The actual cost of the IMPROVEMENT of the house, apartment building, or other rental property is not fully deductible in the year in which you pay for it. Instead, investment owners get back the cost of real estate through depreciation. This involves deducting a portion of the cost of the IMPROVEMENT over several years.

3. Repairs. The costs of repairs to rental property (provided the repairs are ordinary, necessary, and reasonable in amount) are fully deductible in the year in which they are incurred. Good examples of deductible repairs include repainting, fixing gutters or floors, fixing leaks, plastering, and replacing broken windows.

4. Local Travel. Landlords are entitled to a tax deduction whenever they drive anywhere for their rental activity. For example, when you drive to your rental building to deal with a tenant complaint or go to the hardware store to purchase a part for a repair, you can deduct your travel expenses.

5. Long Distance Travel. If you travel overnight for your rental activity, you can deduct your airfare, hotel bills, meals, and other expenses. If you plan your trip carefully, you can even mix landlord business with pleasure and still take a deduction.

6. Home Office. Provided they meet certain minimal requirements, landlords may deduct their home office expenses from their taxable income. This deduction applies not only to space devoted to office work, but also to a workshop or any other home workspace you use for your rental business. This is true whether you own your home or apartment or are a renter.

7. Employees and Independent Contractors. Whenever you hire anyone to perform services for your rental activity, you can deduct their wages as a rental business expense. This is so whether the worker is an employee (for example, a resident manager) or an independent contractor (for example, a repair person). Be sure to get their taxpayer ID and provide them with a 1099 if appropriate.

8. Casualty and Theft Losses. If your rental property is damaged or destroyed from a sudden event like a fire or flood, you may be able to obtain a tax deduction for all or part of your loss. These types of losses are called casualty losses.

9. Insurance. You can deduct your insurance premiums for your rental activity. This includes fire, theft, and flood insurance for rental property, as well as landlord liability insurance.

10. Legal and Professional Services. Finally, you can deduct fees that you pay to attorneys, accountants, property management companies, real estate investment advisors, and other professionals. You can deduct these fees as operating expenses as long as the fees are paid for work related to your rental activity.

Hiring a good property management company is the key to a profitable rental property. A good property management company will keep track of all of your expenses and provide you with an annual statement and a 1099 for your taxes.

Kent Forsythe, Licensed California Broker
Member of California Assoc. of Realtors,
National Assoc. of Realtors, Owner of
Superior Property Management. Contact Kent
@ kforsythe@superiorpropmgmt.com
(877) 308-7368