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Tax, SDIRAs & Cost Segregation

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Som Jafari
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Not able to write off repairs

Som Jafari
Posted Apr 9 2024, 17:50

Hi everyone, I filled my taxes jointly for the first time.

Tax guy said I can't write off any repairs/upgrades because my wife and I W2 income is over $150,000.

Is this correct?!

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Theresa Harris
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Theresa Harris
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Replied Apr 9 2024, 18:19

I'm in Canada, but I know some types of repairs you can only write off when you sell your place.  It has nothing to do with how much you make rather what the repairs are.

Ask your accountant to show you where this is written on the IRS website.

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Zachary Jensen
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Zachary Jensen
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Replied Apr 11 2024, 06:52
Quote from @Som Jafari:

Hi everyone, I filled my taxes jointly for the first time.

Tax guy said I can't write off any repairs/upgrades because my wife and I W2 income is over $150,000.

Is this correct?!

 Hey Som, 

While i dont know your situation exactly, it is unlikely you cannot use the losses created from repairs/maintenance / capex at some point. I would suggest you find an accountant who is more specialized in real estate, and fast too! The deadline is almost here 

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Bruce Woodruff
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Bruce Woodruff
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Replied Apr 11 2024, 07:04

But you can still depreciate major repairs though?

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Zachary Jensen
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Zachary Jensen
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Replied Apr 11 2024, 07:33
Quote from @Bruce Woodruff:

But you can still depreciate major repairs though?

 Indeed, and depending on a variety of factors you can even use them to offset your w2 income 

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Som Jafari
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Som Jafari
Replied Apr 11 2024, 13:58

@Zachary Jensen hi Zach do you know under what circumstances you can use losses to offset your W-2 income? as far as I know you can only use them to offset income if you’re at real estate professional. Otherwise, all of your losses will be carried over to the next year or will be applied when you decide to sell the house.

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Joseph Beilke
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Replied Apr 11 2024, 14:05

I would recommend speaking with another CPA.  Time is running out,  file for an extension, make a payment and get a second and third opinion.  You might have been filing incorrectly in the past and might be owed some money.

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Zachary Jensen
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Zachary Jensen
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Replied Apr 12 2024, 07:49
Quote from @Som Jafari:

@Zachary Jensen hi Zach do you know under what circumstances you can use losses to offset your W-2 income? as far as I know you can only use them to offset income if you’re at real estate professional. Otherwise, all of your losses will be carried over to the next year or will be applied when you decide to sell the house.


 Indeed there are other ways like the short term rental loophole. Also losses that are carried over are passive forever, you cannot make them active at a later time. 

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Basit Siddiqi
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Basit Siddiqi
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Replied Apr 17 2024, 20:39

You can always include rental expenses on your tax return if you have a rental property that is deemed in service.

The question, when summing all your rental income and expenses, and you are net negative, is whether the loss can offset your other forms of income or if the losses are deemed passive and carried forward.