Firefighter · Sacramento , CA · Member since 2015 · 50 posts · 8 votes
Hello BP community. I bought my first property in late October. Its a 3 unit in Sacramento California. I have two of them rented and I live in one. My question is what can I write off on my taxes this up coming year? I have made about $5k in repairs to the unit I live in. I have made very little repair to the other two units. Does the fact that I live in one of the unit affect my taxes? I have the property recorded at the county office as a investment property. If that changes anything. I would appreciate any advice or tips from people that have been in a similar situation. Thank you.
Deerwood, MN · Member since 2014 · 184 posts · 122 votes
10y
Congrats. Others will know more, but I think you can only deduct expenses for the rented units. Also can depreciate 1/3 of capital expenditures for building components, like new roof. I recommend you get a copy of the NOLO tax deduction guide for landlords.
Deerwood, MN · Member since 2014 · 184 posts · 122 votes
10y
Congrats. Others will know more, but I think you can only deduct expenses for the rented units. Also can depreciate 1/3 of capital expenditures for building components, like new roof. I recommend you get a copy of the NOLO tax deduction guide for landlords.
Hello BP community. I bought my first property in late October. Its a 3 unit in Sacramento California. I have two of them rented and I live in one. My question is what can I write off on my taxes this up coming year? I have made about $5k in repairs to the unit I live in. I have made very little repair to the other two units. Does the fact that I live in one of the unit affect my taxes? I have the property recorded at the county office as a investment property. If that changes anything. I would appreciate any advice or tips from people that have been in a similar situation. Thank you.
You may want to talk to the county, They often have a proration for owner occupied properties in reagrds to property tax exemptions.
Your repairs for the personal unit are not deductible outside improvements 2/3 deductible or depreciable. That will depend upon the nature of the item.
If utilities are not separate you will prorate based upon occupancy.
Investor · Juneau, AK · Member since 2015 · 980 posts · 741 votes
10y
Congrats and good advice above Jorge, and as a brand new landlord, take a look at IRS form schedule e for some basics categories of deductions....I often tell people if you do your own taxes and have itemized and handled some more complicated worksheets, deductions, and credits, then you may be able to go diy on taxes for a couple of rentals with some good resources..but if you have not done taxes or just simple 1040 ez stuff, I would use a cpa with some real estate background in helping small, residential landlords..best of luck
The above link has some good useful info. Get with a good accountant unless you know this stuff inside and out. Buying rentals is not all long term dep. Identify and split out appliances into their own categories. And since you are managing the other two units, ask him/her about the home office deduction. Squeeze every bit of juice out of that lemon. If you want a referral for an accountant PM me. Congratulations!!
Firefighter · Sacramento , CA · Member since 2015 · 50 posts · 8 votes
10y
Thank you all for the advise. It looks like I will have to get with an accountant or tax expert during the first couple of years while I learn as much of the tax laws as possible. Again thank you BP community.
Thank you all for the advise. It looks like I will have to get with an accountant or tax expert during the first couple of years while I learn as much of the tax laws as possible. Again thank you BP community.
This will be money well spent.
I wish you the best of luck in your future endeavors