All Forum Posts by: Colin W.

Thanks Steve. I figured it out, the deduction taken on Schedule C flows to Schedule E. MST with corporate tax experience.

My personal income tax knowledge is purely academic, and of course my own personal returns.

Thanks for the responses. Curt, yes, a CPA can certainly be beneficial to those with complex returns or little understanding of the tax provisions. Turbo Tax is sufficient for most people, especially those with a background in tax which I have. This question can be answered by someone who prepares tax returns on a regular basis which I do not do.

Steve,

I have three rental units. I'm not too concerned upon defending my position as I feel its defendable with support and documentation. The annual deduction is not that material.

With that aside, now I'm just curious where other real estate investors take their Home Office Deduction. If your rental income is all reported on Schedule E, you will have no rental income on Schedule C to make the Home Office Deduction worth taking.

Thanks.

For my rental properties I maintain a home office. Should this deduction be taken on Schedule E along with my other rental expenses? I ask because Turbo Tax lists the home office deduction on Schedule C.

Thanks for the responses. I have the tax assessor's ratio, but it assigns 30% to land. This seems very high. In addition, the assessed value is far lower than comparable home sales within the last year. I'm not complaining as this lowers my property tax bill, but I would certainly not used the assessed value for my depreciable basis as it is far too low.

I looked at some lots that sold and arrived at $ / ft. Using this method and the FMV estimate, the land value is closer to 12%. But I guess it would be safer to use the 30%.

Less deductions in depreciation, but a smaller capital gain when I sell.

When converting a property from personal use to a rental property, I understand you use the lesser of the adjusted basis (AB) or FMV. I've looked at comparable sales in the neighborhood at around the time of conversion. However, what is the best way to determine what portion of the AB or FMV is depreciable, i.e. non-land.

Would it be acceptable to use the "replacement cost" of the dwelling as outlined in my hazard insurance policy, as this value does not include land?