All Forum Posts by: Taylor Brugna

Eric Peterson You can deduct passive losses against ordinary income without limits if you qualify as a real estate professional.

Dave Foster

Ben C. Agreed, but I haven't seen a client take that road presumably because a heloc on an investment property is extremely difficult to get, and I'm sure flipping makes it worse.

Jack B. Are you sure you don't qualify for the sec 121 exclusion? I saw 2.5 years and just thought to double check..how long have you rented the property out for?

Ben C. Yup, deductible as an expense against the flip.

@Craig Bazarsky I'm from NYC as well and I highly recommend speaking with @Jeff Copeland. He is an excellent realtor and PM, especially for out of state investors. I've closed on quite a few properties with him! 

@Marc Izquierdo If it's a multifamily with 4 units you can divide by 4. If you were renting rooms out of a singe family house you can use square footage. 

Marc Izquierdo I didn't get a chance to open the spreadsheet because I am on my phone, but if you are living in one unit and renting out the other 2 the tax situation gets a little complicated. Basically, general expenses for the whole property would be allocated between the rental portion and owner occupied portion (things like mortgage interest and taxes). The rental portion of expenses would be reported on schedule e and the personal would be reported on schedule a if applicable. Direct repairs to a specific unit would be allocated to that unit. For example, painting your personal unit would not be deductible but painting one of the rental units would be. To answer your question, the income you are taxed on is the rental income, less depreciation and amortization for the rental units only,expenses directly related to unit, and the allocated portion of general expenses. You may also get a deduction on schedule a for mortgage interest and taxes for the personal portion. Hope this helps!!

Andreas W. That is incorrect, it is entirely dependent on what the HELOC is being used for. If a HELOC on a primary is used to purchase a rental property the interest expense would be reported on schedule e. Hope this helps!

Andevaughn Reynolds , Best of luck! You'll find plenty of great resources around the site.