Underwriting and phantom expenses

[Rich Hupper]

Hi Folks, 

I think a lot of us are aware how great depreciation is for people who own investment properties. However what about for new investors trying to reduce their taxable income but not reduce the income underwriters use to guarantee a loan?

What expenses do not cost a filer anything and won't affect their loan eligible income?

For example, investors who do not have an investment property yet, can they depreciate their personal computers or their cell phones?  

Any other examples would be great to learn about.

Thank you

[Michael Plaks]

@Rich Hupper

Depreciation is the only deduction I can think of that works as a deduction for taxes but is added back by underwriters for loan eligibility.

Investors in rental property cannot deduct anything until they have their first property.

The only people who can start deducting expenses without owning a property are non-rental investors: flippers and wholesalers. However, their depreciation usually will not be added back by underwriters, and it is not significant anyway.