Month: July 2019

The Alternative Minimum Tax is a very important consideration for taxpayers who own real estate because just about every tax rule applying to real estate is different for the AMT than it is for the Regular Tax. This article on Real Estate and the AMT will address those situations where the individual holds the real estate as an investment, typically as rental property. The differences in tax treatment between the Regular Tax and the AMT can be significant.

Interest expense

Interest paid on the mortgage taken out to acquire the property is fully deductible, both for the Regular Tax and the Alternative Minimum Tax. Unlike itemized deductions that allow a tax benefit for what amounts to personal expenses, the tax law generally allows all deductions a taxpayer has to make in the pursuit of business income. Thus, the limitations discussed in the previous article on home mortgage interest do not apply.

If, however, the equity in the rental property is used as security for an additional loan – a second mortgage, for example – then the taxpayer must look to how the proceeds of that loan are used to determine interest deductibility. If the proceeds are used for a car loan or to finance a child’s education, for example, then the interest is nondeductible personal interest. If the proceeds are used to improve the rental property, the interest is deductible.

Suggestion – it is best that taxpayers keep personal borrowings separate from business borrowings. Mixing the two creates recordkeeping challenges and can result in disputes with the IRS.

Property taxes

Property taxes paid on rental or investment property are allowed in full both for Regular Tax purposes as well as for the Alternative Minimum Tax.

Planning idea – if you have an opportunity to pay your property tax bill either this year or next, pay it in a year when you have enough income from the property so as not to generate a rental loss. This strategy can help avoid triggering the passive activity loss limitations described below.

Example – in Florida property tax bills are mailed in October, and are payable under the following discount schedule: November – 4%, December – 3%, January – 2%, February – 1%. If you have a loss from the property in 2010 but expect to generate income in 2011, do not pay your bill in November or December – forgoing that small discount could help you avoid the loss-limitation rules.

Depreciation

Depreciation is allowed for property held for investment. The portion of the cost allocable to land is not depreciable, but for the building itself and the furniture, appliances, carpeting, etc. a depreciation deduction may be taken.

Real property (this is the legal definition of the house or other building) held for rental/investment may only be depreciated for Regular Tax purposes under the “straight-line” method, over a useful life of 27.5 years. Thus, a property with $275,000 allocated to the building would be depreciated at the rate of $10,000 per year.

Personal property (this is the legal definition of things such as furniture, appliances, carpeting and the like) may be depreciated for Regular Tax purposes under an “accelerated” method over a useful life of five years. An accelerated method allows a larger depreciation deduction in the early years, in recognition of an obsolescence or decline-in-value factor that you see in new property (cars are a good example).

For purposes of the AMT, however, personal property may be depreciated only by using a straight-line method. Thus, an AMT item will be generated in the early years if the accelerated method is used.

Planning idea – for personal property consider electing the straight-line method for Regular Tax purposes. While giving up a little tax benefit from the greater depreciation in the early years, it could mean avoiding paying the AMT.

Active/passive investment rules and the “at-risk” rules

A taxpayer who is not “active” in managing investment property may not use losses from rental property to offset other income such as salaries and wages, dividends, interest, capital gains, etc. Instead, these losses are deferred until the taxpayer either sells the property or generates passive income from this or other passive investment sources.

The at-risk rules similarly deny using these types of losses to the extent the taxpayer has acquired the investment with borrowed money and does not have personal liability on the debt.

Planning idea

If these loss limitations apply, consider the planning ideas mentioned above to minimize the losses being generated each year. They are not doing you any good anyway.

Sale of the property

Several different AMT issues can arise on the sale of rental/investment property. One is that your gain or loss may be different for the AMT than it is for Regular Tax purposes. This would be caused if different depreciation methods were used. For example, if the personal property was depreciated using an accelerated method for Regular Tax purposes, then the basis in that property when calculating gain or loss on sale would be different because the straight-line method had to be used for Alternative Minimum Tax purposes.

Gain on the sale of investment property generally is capital gain, although a portion may be treated as ordinary income depending on the accelerated depreciation method was used. Capital gains in and of themselves are not an AMT item, but nonetheless they can result in AMT being paid. This is because the AMT exemption amount is phased out for taxpayers at certain income levels, so this additional income can have the result of reducing the exemption which in turn increases taxable income for purposes of the Alternative Minimum Tax.

Jet skiing has become a favorite water sport for many, and this is with good reason. These personal water crafts are a lot of fun whether on the ocean, river, or lake, and can accommodate up to four people at a time, depending on the size of the jet ski. Since jet skiing is a lot of fun, especially during the summer, many people have chosen to buy their very own personal water crafts. However, renting them is just as viable an option, especially if you are out of budget. Jet ski rentals are available in various resorts as well as in specialty rental shops.

Why you should buy your own jet ski

There are several advantages in buying your own jet ski, as opposed to simply going for jet ski rentals. If you are someone who goes jet skiing on a regular basis and you dont mind with the upkeep required in owning one, buying a jet ski will be a good investment for you. This will allow you to enjoy the sport anytime you want to and you dont have to wait in line in resorts or rental shops just to be able to secure a jet ski for your water excursions. Also if you intend on opening a jet ski rental business in the future, buying your very own jet ski will orient you with its maintenance needs and other requirements for upkeep.

Although buying a jet ski requires a bigger expense than simply renting, there are some cost-effective options in the market. Buying a used jet ski can be more economical than actually buying a brand new model. Some of these second-hand jet skis may still be in mint condition, especially if these have not been used frequently by their original owners. Although jet ski rentals are less expensive, buying a used jet ski can give you a very good deal, too.

The advantages of jet ski rentals

There are several reasons however why many people choose to rent jet skis, and one of the foremost reasons of course, is affordability. You can choose to rent for an hour or an entire day, which is always considerably cheaper than having to buy an entire vehicle for your summer outings. You can also shop around for rates in advance, so you are sure to end up with the most cost-effective deals possible.

Most novices will do well to choose jet ski rentals instead, as many rental services also offer tutorials to first-time users. If youre still learning the ropes of jet skiing, going for rentals will allow you to orient yourself first and to experiment on whether youre comfortable with the thrill involved in riding an actual jet ski.

Jet skiing is no doubt a fun way to spend some relaxation time alone or some fun time with the entire family. Before buying your own jet ski, check first whether you will be able to keep up with its maintenance requirements or if going for jet ski rentals is a smarter, more cost-effective choice for you.

Living in rental apartments for rent in Tucson can be a very pleasant experience if you have a good landlord.Yet, sometimes if you aren’t careful, you could end up in an apartment where you don’t actually get what you paid for.Below, we offer a few tips that may prove useful to help you avoid the kinds of mistakes other people have made when renting apartments.

If You Would like to Pay Less, Then Don’t Be Afraid to Ask

It isn’t always possible to negotiate a lower rent, yet it is still worth asking, as some landlords may be willing to compromise.Okay, you may not actually be able to get them to lower the rent price, but you may be able to get them to reduce other payments you are required to make.

For example, if you require a second parking space or would like to be able to have a pet in the apartment, then you can see whether these additional costs can be waived.But if you are looking to get the actual rent reduced, then it may prove a good idea to get the lease extended.Generally, most leases on apartments tend to be for periods of 6 to 12 months.

If you agree to stay on for an additional month or two, then you are assuring the landlord that they will be receiving rent for this additional period.By doing this, you may find that the landlord is more willing to offer better rental terms.

Make Sure You Get Everything in Writing

If after reading through the lease agreement you are unclear about something, ask the landlord to clarify this for you in writing.When they do this, it immediately becomes a part of the agreement.This is also the same if you notice that there is something wrong with the lease.

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Tax deduction benefits provided under rental property can be a boon to landlords. There are a host of benefits that this scheme provides. These benefits can be obtained via a number of heads like payment needed for cancelling a lease, rent amount, expenses incurred by the renter etc.

Here is a list of some of the most common deductible expenses:

1. Interest: Payments towards the mortgage interest, payments towards the loans for improving or acquiring rental property as well as interest accumulated on credit card payments all constitute deductible interest. for more detials:-www.lose-10-pounds-quick.com.Very often the credit cards are procured in order to buy services or goods towards the rental. For most home owners who have rented their property it is this interest which constitutes the largest portion of deductible expense.

2. Depreciation: Very often you may lose out on the property value because of depreciation. However now you can reclaim the rental property costs via depreciation. Such benefits can be provided from the second year onwards. As a landlord you can claim all depreciation costs over as many as 27 and a half years!

3. Repairing: Things like floor tiling, fixing leaks in the house, repainting jobs, the replacement of windows which have been broken, plastering as well as other expenses constitute the largest portion of repairs. You can avail benefits of deductible expenses in the same year in which you would have incurred these expenses. Thus, other than capital improvement expenses you can avail deductible benefits with reasonable, necessary and ordinary forms of expenses.

4. Travel expenses: There maybe times when you need to travel to your rented property either because you need to discuss something with the tenant or for repairs. In such cases travel expenses incurred can be claimed under the tax deduction scheme of rental property. As far as repairs go, you can also claim for expenses incurred while traveling to electrical or fault fixing organizations or plumbing companies etc. for visit detials:-www.make-ezee-money.com.If you need to fly to another city you can even claim your airfare expenses and even hotel stay expenses to avail tax deduction. If you are smart enough you might just want to use this facility to combine a business trip with some leisure activities!

5. Home office: If you have set aside a portion of your house for rental business activities, you can claim these expenses towards the home office from your taxable incomes.

6. Losses: You may have suffered major losses due to floods or fire breakouts. In such cases you can claim a tax deduction either on the basis of the total loss or part of the loss. The amount of deduction provided will also depend on insurance amount being claimed by you.

7. Insurance: If you are paying a premium towards the insurance on your rented property you can deduct the amount under this benefit too. Things like theft, fire, flood insurance as well as insurance for landlord liability are covered under the scheme.

8. Services: These include diverse fees that get paid to companies for property management, attorneys, investment advisors of real estate, accountants, as well as other professionals as long as their services are towards rental activity purposes.

There are certain non deductible expenses too such as modification expenses like addition of new rooms in the house, vacancy resulting in loss of income, obtaining new tools or appliances, building new roofs or providing fencing in the house etc.

It is a given fact that once you travel, you would always wish to feel like you might be at your own home. Good thing a recreational vehicle or simply referred to as RV has become available. Tampa RV rentals are widely available for those individuals inhabiting in Tampa who want to take a trip around Florida or in other nearby states. If you haven’t rented one previously, then make sure to do the steps stated below to get appropriate details about it./p>

Make a Search On the internet

There are actually various sizes and features available for RVs. With that, RV Rental Tampa can provide you many choices to match your needs and personal preferences. You don’t have to invest longer hours of driving and looking for all the rental firms in the location. Seeking for the dependable RV rental companies that are providing their services in Tampa and other areas is the only thing that has to be performed.

The things that you want to know are all posted on their very own website. The offered recreational vehicles are viewable there. The rates are also placed in the site which allows you to make an assessment of the possible cost. Contact information are also present in their website for you to easily get to them in case you have additional inquiries regarding their vehicles and for rental deals as well.

Ask about the Costs

It is only normal that rental and service costs in every Tampa Rent an RV differ from one another. So, it’s good to ask first the firm concerning such matter. Most of the firms usually provide renters package offers or service fees that are based upon miles being travelled. This will also be a great opportunity for you to receive promos and special discounts. Be sure that you are well-informed regarding the rental cost because this can be decreased or increased because of several aspects.

Your Needs Ought To Be Prioritized

It is obvious that obtaining the services of Tampa RV rentals doesn’t come cheap. But the thing is, you can always make the fees reduced if you wish to. The very first thing that you can do is suit your need with the ideal RV unit. Large unit that can accommodate everybody who will go with your trip must be selected. Do not choose RVs with additional features and supplies that you don’t really need since it will needlessly raise your expenses.

Genuinely, one sensible plan that you can consider is hiring RV Rental Tampa even though it is quite higher in price. In this way, you can save cash because you can have transportation, food, and lodging all in one. There is no need to check in to hotels since comfy and clean beds are already accessible. If you want a particular spot due to its view, then you can just pull over. As there is a built-in kitchen area accessible, cooking will not be a problem any longer. Truly, renting an RV is the greatest thing to do if you want to have a more convenient road trip.

Basics and particulars are being discussed in this write-up. While you have hopefully learned various helpful ideas, it’s simply the start. Using this facts is really important in order to make the information more useful. Visit Riverview RV rentals if you need to know extra information on renting a great RV.