Chicago, IL · Member since 2016 · 238 posts · 68 votes
So my wife and I are in a contract to purchase a 2-flat and we'll be living in one unit while renting the other one. I know that expenses for upgrades and repairs can be written off, but I found it hard to figure out what other allowable expenses there are. We will not (at least for a bit) be using an LLC and will just be self-managing the property. I'm expecting there to be a decent amount of updates done soon, so I'll be able to expense those, but I wasn't sure if things like operating meetings, canvasing the neighborhood to compare other prices (mileage and or related dinners to see the area), etc. are included if we're not an LLC.
For the record, I'm not wanting specific legal advice as we plan on getting a CPA before tax season, but more of a guideline on what we can and can't claim as operating expenses for the unit we'll be renting. Thanks in advance.
Fresno, CA · Member since 2015 · 145 posts · 59 votes
10y
I'd like to follow this as well. As far as I know (which unfortunately isn't much on the tax side) all of those mentioned would be allowable operating expenses. I have an owner occupied duplex that I self-manage and I typically roll all of that into my business expenses at the end of the year. I've had one of my duplexes for about 7 years and when I wasn't occupying and I lived in another city I would add the gas and mileage and even hotel stays. Obviously all maintenance, repairs etc. I write off as well. Interested to hear other responses.
Chicago, IL · Member since 2016 · 238 posts · 68 votes
10y
Thanks! It's all new to me, but my wife and I are seriously looking forward into taking advantage of every tax benefit we can find. The rent isn't that high, so we'll likely be able to write off some of our regular salary as well (assuming I understand the $25,000 rule correctly). I've been obsessing with BP for about 6 months now hoping for my first deal to go through, so assuming that inspection/appraisal go well, we should be up and running in 6 weeks!
Real Estate Agent · Albuquerque, NM · Member since 2015 · 542 posts · 193 votes
10y
It would be my understanding that you can only write off expenses for repairs and improvements to the rental portion of the property, not your owner-occupied portion.