Cadillac, MI · Member since 2019 · 16 posts · 2 votes
Hello BP community. I have 2 rental properties. One shows profit, and the other shows a loss. My accountant says that I can't deduct the losses because the "standard deduction" is higher than my losses. So there is no reason to include the loss property on my schedule E. Is this correct or do I need to find a new accountant?
Rental Property Investor · Shelton, CT · Member since 2012 · 92 posts · 176 votes
5y
@Joel Trout
By way of background, I am a cpa ( a partner at a large firm nonetheless), and I also hold an MST (master of science in tax). I am not just spitballing here, you are getting bad advice.
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
5y
@Joel Trout I read your responses, but the details still don't add up. Are you are saying this property was in use as farm land previously? Was that part of 2020?
On the second property, you said your income was $500 and expense was $2800. I can't imagine that $500 income would cover even a months worth of rent on a property. How many days was this rented in 2020? Prior to renting the property, was it used as a personal residence?
You mentioned that you sold property 2. Assuming you only collected $500 rent in 2020 and already sold the property, it may not even meet the threshold of being a rental property.
Sorry I should have asked these questions before my initial answer. I made the wrong assumption you purchased this late in 2020 as a new rental.
Cadillac, MI · Member since 2019 · 16 posts · 2 votes
5y
Joe splitrock. I'm sorry you are confused. $500 was one years rent. (365 days) Yes, the property was used for a farm that I owned(4 years ago) but I moved and could no longer farm the property, so I rented it out. There was no residence on property, so I couldn't claim it as a residence. I didn't sell the property until 2021.