All Forum Posts by: Graham Kuzek

Missed the last one for a work function but planning to be at this one.

@Joe Splitrock Haven't been in that scenario, property isn't rented out yet, not until November this year.  I do appreciate all the feedback though. I didn't understand that the IRS will regardless charge the recapture on all the allowable depreciations no matter what if it's claimed on the taxes or not.  So I definitely will be claiming it.  Different tax laws in Canada, only the amount depreciated is recaptured.

I had a CPA file for me in 2019 when I had Canada and USA income but I wasn't a property owner in the USA until 2020.

@Allan C.  I understand the concept of the depreciation recapture and how it is to be paid back on sale of the property.  I suppose I could explain a bit more as to why I would ask the question.  For instance on my Canadian property, if I were to sell, I would only pay capital gains on the appreciation after the point I classified the property as an investment as opposed to being a primary.  If I were to claim CCA (Capital Cost Allowance aka depreciation) I would be on the hook for capital gains at my original purchase price which at the time is over $100k less than when I converted its use.

So the reason I ask about my Virginia residence is because no matter what, the property is going to be taxed as long term capital gains upon a sale even though the first $60k of appreciation, I lived in it.  Would it still be worth claiming depreciation?  From what I read and understand, it would be advantageous to deduct, just looking for other opinions or input.

@Charles DeRiso Yes, I did that with my first property.  I bought with a 20 year loan with it being a primary residence.  I always paid a little extra here and there.  After my first 5 year interest term was up, I went back to a 15 year period which added about 2-3 years of payments on it but the bi-weekly payment dropped about $150.  My variable rate is 1.55% so paying a little extra interest doesn't matter. Plus its deductible.  I'd go back as far as I can each time especially with the cheap cost of money right now.

Just moved here to Raleigh area. Good luck finding anything under 300k in decent shape or decent neighborhood as everything has skyrocketed. Could potentially find a townhouse at that price point. Any SFH that wouldn't require much work is likely going to be on the outskirts in the Clayton, Garner, Fuquay, Angiers, Wake Forest or Durham areas. I'm not the most familiar with the Triangle Area but there's a few places I wouldn't be looking. There is announcement of Apple building a headquarters here as well as a few other big corporations (Amgen is one) coming to the area so the momentum is definitely going upwards.

I've house hacked twice on two separate properties and both times, I bought on the basis that I could afford the entire property on my own income with no worries.  The rental income from roommates was a bonus.  I know some people that must have a roommate to split costs and that's not always the best case if you have one that moves out or are picky in who you let into your home.  If you move out and turn it into a rental, you can always refinance and/or extend the mortgage term to reduce your monthly payment which is what I've done to improve cash flow.

Hello all, looking for some advice or recommendation.  Also my first BP post so here we go.

July 2020 I bought a townhouse in Fredericksburg, VA for $315k. 20% down payment, 2.75% fixed over 30 years. Do the math and mortgage is less than half the rent. A couple monthly fees and the cash flow would be roughly $700-$800 per month before paying income taxes. Since then just like most places, the value has increased to around ~ $375k. I'm relocating in October to Raleigh area and will likely have a tenant in at the start of November. Yes, I will likely not be fulfilling the 2 out 5 year requirement to avoid the capital gains tax when I eventually sell. Since I've only had this property a short period of time, should I claim depreciation to improve the cash flow after tax or refrain from doing it? If I had to guess, my timeline on the property is somewhere between a 5 & 10 year hold.

I have another property in Canada that I do not since I was claiming it as a principle residence for a few years before turning it into a rental and the increase in value while it was a primary residence would eventually be taxed on capital gains if I did deduct depreciation when I go to sell one day.

Email transfer for my Canadian property, venmo on my Virginia rental from roommates.  Virginia rental will soon be ACH deposit from a management company.