What's considered rental income, and which expenses can you deduct?
Lauren Janoski Group - Coldwell Banker Real Estate的动态
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Many people successfully invest in rental property, but that does not mean it is easy money ??? We explain how to increase your odds of success and reduce your risk ?? https://lnkd.in/d-zzw3Kf #RentalProperty #LandlordTips #InvestmentProperty
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"Can my short-term rental become passive after year one?" ?? If your short-term rental (STR) has an average period of customer use of seven days or less, and you meet one of the seven material participation tests, then your STR is non-passive. This generally allows you to use cost segregation studies and first-year bonus depreciation to generate sizable non-cash losses from your STR and use the losses to offset your other non-passive income, such as income from a W-2 job or active trade or business, which can significantly reduce your tax bills. However, after claiming first-year bonus depreciation, there is typically little to no tax benefit of having your STR treated as non-passive in subsequent years. This begs the question, can short-term rentals become passive after year one? The answer to this question is yes. The average period of customer use and material participation tests are generally annual tests. If your property has an average period of customer use of more than seven days and/or you don't meet one of the material participation tests in subsequent years, your STR will generally be considered passive. This can be done by placing a tenant in the property on a long-term lease, hiring a property manager, automating and streamlining the property's operations, or a combination thereof. Along the same lines, moving into the property as a residence in a subsequent year is also possible and will not trigger the recapture of the depreciation you took in the first year. That said, purchasing an STR property right before year-end and renting it for only a handful of days, then immediately moving in or turning it passive the following year, may raise red flags and is not a practice we recommend. Want to know the top 8 mistakes real estate investors make? Become a subscriber today: https://lnkd.in/ea7gE8CG
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?? Pros and Cons of Renting Out Your Home ?? Thinking about renting out your home? There are several factors to consider before making your decision. Renting can provide steady income and potential tax benefits, but it also comes with responsibilities like maintenance and tenant management. Weighing these pros and cons can help you decide if renting out your home is the right move for you. If you need guidance, reach out for personalized advice and support. ?? Contact me at +1 631-926-0047 ?? Email: [email protected] ?? Visit: https://smpl.is/9h2j8 #RentingOut #LandlordLife #RealEstate #InvestmentProperty #HomeRental #PassiveIncome #PropertyManagement #RentVsBuy #LandlordTips #RentalIncome
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As a landlord or tenant, how dos the budget afffect you? Let us know in the comments. Were you considering selling a rental property expecting Capital Gains tax to be held? Let us hear your thoughts. https://lnkd.in/e2TJzRJ2
