Re: definition of expenses - Landlord Forum thread 361480

Re: definition of expenses by Garry on August 16, 2021 @18:21

Why are you worrying about this? Are you worried about getting audited by the IRS ? I've been a LL for over 40 years, had a regular job for 37 years, been retired for 10 years, and have only been audited 1 time, back in 1987. Have not been audited since. Unless you make over $200,000 per year, ADJUSTED GROSS INCOME, you will probably never be audited.

The current "thing" around the whole country now, is setting a minimum wage of $15 per hour, regardless of what job you are working at, or what state you are in. So why don't you "pay yourself" $20 per hour as a "handyman" when you do various jobs at your rentals, and put those figures down as an expense, along with the parts, and attach each total towards whatever rental it goes to. You cannot pay yourself what the average plumber, carpenter, electrician, painter, roofer, or HVAC person charges , UNLESS you have actually had years of training in those professions, and have the licenses to back them up.

You have only a .01% chance of being audited, and if they ever DO audit you, all they will do is deduct the amount you paid yourself for that year, refigure your taxes, and charge you a little more for taxes owed for that year. YOU WILL NOT BE GOING TO JAIL OVER YOUR DEDUCTIONS.

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Re: definition of expenses by Ted on August 17, 2021 @10:48	[ Reply ]

Thank you Gary. Manage our few properties for 15 years now and it was the first time I heard you can't deduct my own time when I was at a party recently. This person has at least one apartment building so he was at a different level than me. This year we will probably make a little over 200K for the first time in a while and we had to do quite a bit of work on one of the properties due to negligent tenants. Will reduce significantly the write-off for that.

Re: definition of expenses by Bette on August 28, 2021 @18:23	[ Reply ]

It's interesting reading this --- We've never charged off our labor for repairs we've done to our single family rentals throughout the years. EXCEPT when the tenant leaves a big mess at the end (seldom, but it has happened). The cleaning & repairs we did charge for our la labor. I guess we were missing an expense we could have used.

Re: definition of expenses by Robert on August 29, 2021 @20:00	[ Reply ]

According to IRS yo cannot deduct your own labor.