Taxes Checklist - Landlord Forum thread 330287

Taxes Checklist by Jason (PA) on January 25, 2015 @21:19

Relatively new LL here. Any suggestions on preparing for taxes? I own a duplex, reside on the first floor and rent out my upstairs unit to a family of 6. How does it break down for tax write offs for utilities that are shared?

Gas - I pay 100% and use it for heat and hot water
Elec - I pay mine only (but runs the furnace)
Water - I pay 100%
Sewer/trash - I pay 100%
Lawn care/snow removal - I pay 100% (but only benefits them)

Any replies/advice/information is greatly appreciated. Thanks in advance.

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Re: Taxes Checklist by Anonymous on January 25, 2015 @21:43	[ Reply ]

So you'll be filing a Schedule E form. I suggest you get the booklet with worksheet for filling it out. For the numbers, it seems to me that you have the correct idea for estimating your rental costs that you pay on the tenants' behalf. For example, if your sewer & trash bill is $60/month, I'd use $30 for a sewer/trash bill each month for the tenant--or $360/year. Now if the tenant reimburses you this $360, you cannot use it as a schedule E rental expense. You work through all bills in that fashion. I too would like to hear other input/correction.

Re: Taxes Checklist by Garry (Iowa) on January 26, 2015 @00:09	[ Reply ]

I agree with anon. Split all the 100% bills that you pay, in half, just as your duplex is split in half. You must show all the rent they pay you, as income, and can deduct half the utilities, etc. as expenses. You can also depreciate the rental half of your property. Whatever you paid for the property, you must cut that cost in half, which then it makes it your own home, and a rental. You must then deduct 10% to 20% off that price as land value, which cannot be depreciated. I use 10% if it is a small, postage stamp lot, and 20% if it is a full sized normal lot for the neighborhood. Then , the remaining amount you cut in half, and divide that amount by 27 and 1/2 years. That final figure is the amount you can use for depreciation each year. If you should ever move out and rent out your half of the duplex, then you figure the second half of the D. the same way you did the first half. Also, half of the interest you pay on the whole duplex is an expense on the rental side. Any repairs you do on the rental side is also an expense against the rental.