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Rental deductions on leased land - Landlord Forum thread 342707

Rental deductions on leased land by Wildduk (Massachusetts ) on February 2, 2016 @17:58

                              
We rent out a airplane hanger that is on leased land from the airport. We own the hanger but have a 100 yr lease on the land. We pay property tax on it as well. Can I deduct the lease payment as well as the prop. Tax?

Thx
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Re: Rental deductions on leased land by Anonymous on February 2, 2016 @23:16 [ Reply ]
Yes, and yes!
Re: Rental deductions on leased land by Anonymous on February 3, 2016 @06:34 [ Reply ]
I'm not quite sure that the lease payment can be deducted. This question would be best posed to an accountantbor tax preparer.
Re: Rental deductions on leased land by MrDan (Georgia) on February 3, 2016 @09:07 [ Reply ]
If I follow correctly, you own an airplane hanger on leased land from an airport. You in turn rent out the airplane hanger.

If that's correct;

  • The lease payment is reported as income
  • The Property Tax may or may not be tax deductible, depending on the terms of the ground lease.

    If you are the tenant who owns the airplane hanger and lease the land from the airport under a ground lease;

  • The rental payments are tax deductible
  • If the ground lease requires the lessee (tenant) to pay property taxes, than they are a deductible expense for the tenant.
  • If the lease requires the landlord to pay property taxes, than they are a deductible expense to the landlord.

    If you are not a business and use the airplane hanger for whole or in part for personal use, that also affects tax deductions.

    You might want to invest in the services of a 'Tax Attorney' to review your lease and any options, whether you are a tenant or landlord as any missteps in tax reporting can result in penalties or loss of deductions. Your status as a corporation or partnership can also affect your taxable income, which a Tax Attorney can help you with.

    Tax attorneys are lawyers with a Juris Doctor (JD) degree and admission to the state bar, who also have subsequent education in tax law. Some are also CPAs, which enables them to handle the duties of an accountant, as well as those of a legal tax adviser.

    Tax laws both Federal and State are complicated and ever changing. It's best to seek the help of professionals.

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