Rental losses against personal income

[Brian Zaug]

Happy Friday!  Cheers!

So my wife and I are both teachers in NY.   We grossed $251,000 last year on our w2s and we file jointly.   We purchased 2 rentals properties (2 duplexes) last year and with the work/renovations we put into them, we showed a paper loss on them totaling around 10K.  I am not a real estate agent or real estate professional in anyway. I do manage these properties but I don't spend over 50% of my work on these. 

Can I claim my rental losses against my income? 

Thank you in advance for any information...

[Mike Dymski]

Originally posted by @Al Pat:

I like to claim as much as I can as expenses under repairs and supplies rather than capital improvement. Simply because depreciation needs to be recaptured where as expenses do not. I do ensure that the expenses are reasonable and below $2500 per contractor. For example, if my rental needs carpet change within 5 to 6 years that cost $1800 then it doesn't make sense to add it to cost bases but if I replace a roof them it does get added to cost bases. however, roof repair does get expensed. I would recommend seeing CPA, it's a cost of doing business.

The $2500 de minimus safe harbor is awesome.  I cringe when I read posts on BP about investors capitalizing and depreciating things like appliances.