Home     Forum     401k     401k Rollovers
    Register   Login   Members   Search   FAQs     Recent Posts    




A Theoretical Question

Reply to topic
Money Talk > Taxes

Author Thread
floinksy
First Time Poster


Cash: $ 0.25

Posts: 1
Joined: 21 Oct 2012

A Theoretical Question  Reply with quote  

Hello

What ramifications are there on purchasing a property to rent out privately and putting that rent money in a savings account? Would I as the owner be liable to pay tax on the income from the rent?

Thank you.
Post Sun Oct 21, 2012 3:06 pm
 View user's profile Send private message
Publius
Preferred Member


Cash: $ 31.00

Posts: 151
Joined: 12 Oct 2012
Location: Georgia
 Reply with quote  

Yes, rental income is income, though you would treat it more like income from a small business than a paycheck (income - expenses - depreciation of assets etc.). It is filed with your taxes on Schedule E on form 1040.
Post Sun Oct 21, 2012 4:32 pm
 View user's profile Send private message
clydewolf
Senior Member


Cash: $ 50.25

Posts: 248
Joined: 27 May 2012

Re: A Theoretical Question  Reply with quote  

quote:
Originally posted by floinksy
Hello
What ramifications are there on purchasing a property to rent out privately and putting that rent money in a savings account? Would I as the owner be liable to pay tax on the income from the rent?


Publius has properly pointed you to Schedule E.

As the landlord, you receive rent from your tenet. Then you start subtracting expenses for the rental property, things like repairs, taxes, insurance, legal fees, mortgage interest, Schedule E has the list. http://www.irs.gov/pub/irs-pdf/f1040se.pdf

One big item is depreciation you take on the rental buildings as an expense. The property does not get depreciated. You do want to take the annual depreciation because when you sell the property, your adjusted basis must include the depreciation you have taken or could have taken.

It is doubtful you would have any profit to declare on your 1040.

You would be smart to read IRS Pub 527, Residential Rental Property: http://www.irs.gov/pub/irs-pdf/p527.pdf
Post Sun Oct 21, 2012 6:19 pm
 View user's profile Send private message

Reply to topic
Forum Jump:
Jump to:  
  Display posts from previous:      





Money Talk © 2003-2016