Taxes on a long term rental property

Taxes on a long term rental property

Seattle, WA · Member since 2014 · 77 posts · 5 votes


I have a question on tax regarding a long term rental that I recently sold.

Here is the situation:

  • Bought a house in 2010 for lets say 100K.
  • Spent 50k in 2011 on repairs and to make the house rentable.
  • After repair the house was a rental.
  • Now I just sold the house in 2022 for lets say 300K.


Now I am doing the taxes for this house and the way I am calculating the taxes is 300k - 150k = 150 taxable. 

Question : Is that ok to include the expenses that I incurred in 2011 while having this house as a rental?

Note : I never reported the 50k that I had spent on the house repairs.

I know I made a mistake by not reporting the expenses incurred in 2011.
Back then I had no clue that you have to report expenses in the same year.

I thought I will deduct these expenses whenever I will sell the house.

Question: How can I include the expenses of this rental that I have spent in 2011.

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  • New to Real Estate · OR · Member since 2021 · 66 posts · 23 votes
    4y

    Do you have any documentation of the repairs completed? 

  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    4y

    Talk to an accountant, but if you've never claimed your repairs and you have all of the receipts, yes you can deduct those. You should also claim any expenses with selling the house (lawyers fees).  Don't forget if you sold it for $300k-make sure that is the amount AFTER the real estate fees (ie commission to the realtors).

  • Investor · Fayetteville, NC · Member since 2015 · 55 posts · 13 votes
    4y

    If you have been depreciating the property over the past 12 years you'll need to recapture those taxes as well. I always have a CPA handle my taxes. Each state has different tax laws. I see you are in Seattle, WA. Washington has an excise tax, ~1% depending on the sales price. A few hundred dollars each year to pay a professional to do my taxes protects me from any chance of getting myself in any trouble. In reality the CPA saves me money by ensuring I receive the highest tax deductions possible. All my properties are managed by a well established PM firm and I use the same CPA as the owner. I would suggest reaching out to other local investors and PMs to find a good CPA.

  • Seattle, WA · Member since 2014 · 77 posts · 5 votes
    4y

    yes I have all the receipts.

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