How to deduct personal labor as an expense for a rental?

[Nick M.]

I purchased a rental property in 2009 and had to do major remodeling before it was ready to rent. I do not have an accountatnt yet but planning on looking for one to have my taxes done this year. This is my first rental property.

I did most of the work myself with my wife and was wondering if there is a way to deduct all those labor hours as an expense and at what rate would it be reasonable. Or what is the proper way to go about getting paid (or deducting) for rendering services for your own property.

Any ideas are appreicated.
Thanks in advance.

[J Scott]

There may actually be benefits to not paying yourself this money, and keeping it in the company, assuming you own the property in an LLC taxed as an S-Corp.

Basically, if you pay yourself without "yourself" being another entity, you're on the hook for self-employment taxes for 100% of the income.

But, the company -- if taxed as an S-Corp -- can avoid paying FICA taxes on some of the income that will ultimately be passed through to you (and any other shareholders/members) at the end of the year.

Just something to think about...