Posted: 2/3/2012 10:47:54 AM EDT
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I bought a house in July of 2011 and moved in it on July 28th. I have owned a condo since 2001 and have been renting it out since I moved into my new house on July 28th.
- I charge my renter $700 per month for the condo. For 2011 she paid me $3500 - The morgage on the condo is $592/mo - The HOA is $218/mo So the condo costs me $810 /month and my renter gives me $700/mo so I still have cover the additional $110. 1. Do I have to claim the rent I am payed as income even though it just covers my morgage and half the HOA? 2. Can I claim the morgage interest on the condo and house for 2011? Thanks |
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Assuming it doesn't work differently for a condo than it does a house: 1. yes. It's income... 2. yes. You'll also do a yearly depreciation cost on the property that offsets stuff as well. When you run everything through software it'll walk you through that process. So although you're losing money (I lose about $300/month renting my house  ), the depreciation covers most of it as a write off. Turbo tax deluxe can be your friend and is very straight forward. |
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Quoted: Depreciation? You mean the age and value of the condo over time? Yeah. http://www.irs.gov/publications/p527/ch02.html Covered there. Turbo tax simplifies the process and automatically does it every year for you if you use them... |
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Quoted:
I bought a house in July of 2011 and moved in it on July 28th. I have owned a condo since 2001 and have been renting it out since I moved into my new house on July 28th. - I charge my renter $700 per month for the condo. For 2011 she paid me $3500 - The morgage on the condo is $592/mo - The HOA is $218/mo So the condo costs me $810 /month and my renter gives me $700/mo so I still have cover the additional $110. 1. Do I have to claim the rent I am payed as income even though it just covers my morgage and half the HOA? 2. Can I claim the morgage interest on the condo and house for 2011? Thanks Income gets added to your total income. You get to right off mortgage interest on both. Like the earlier poster said use Turbo tax deluxe version. And BTW.. Ouch! I thought I was bad off only making $100 a month on my rental. Thats barely enough to cover my minor repairs. |
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Quoted: Quoted: I bought a house in July of 2011 and moved in it on July 28th. I have owned a condo since 2001 and have been renting it out since I moved into my new house on July 28th. - I charge my renter $700 per month for the condo. For 2011 she paid me $3500 - The morgage on the condo is $592/mo - The HOA is $218/mo So the condo costs me $810 /month and my renter gives me $700/mo so I still have cover the additional $110. 1. Do I have to claim the rent I am payed as income even though it just covers my morgage and half the HOA? 2. Can I claim the morgage interest on the condo and house for 2011? Thanks Income gets added to your total income. You get to right off mortgage interest on both. Like the earlier poster said use Turbo tax deluxe version. And BTW.. Ouch! I thought I was bad off only making $100 a month on my rental. Thats barely enough to cover my minor repairs. Sucks balls. Either take a little loss renting or $30-40k loss selling.  Repairs are deductible as well. Had to replace carpet, paint, and blinds after the last renter...$4500 or so of wtf that was deducted. And now that it's a rental...if you sell at a loss...any loss over the normal amortized depreciation is deductible. |
| Yeah I probably could not have got more than $700/mo anyway in that area of town. I pay a rental insurance policy and appliance/furnance insurance on the property around $40 per/ mo. If the refrigerator or furnace dies at the rental they just come out and replace it, if the renter floods out the guy below the rental insurance covers that. |
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You want to claim it for the loss, including depreciation. When you sell the condo, you will a bit messier return than had it never been rented out. There is a fairly decent exclusion of income for sale of a personal residence that you lived in for 3 of the last 5 years. That said, if you have a gain on the sale, the depreciation allowed or allowable (so even if you don't take it, it will be taxed) will be recaptured and you will pay tax on it. Likewise, I think it is also at a different rate than if the condo had been sold as a capital gain property.
Is the condo in your name - that can also be a neck breaker. Know one guy who sold a condo that was in his father's name. Was not his father's residence and the IRS was not amused with their returns. I think his father just managed to pay off the installment agreement before he died. |
| Use Turbo Tax and the program will guide you on the setup. The income goes on Schedule E of the return. The mortgage interest, maintenance, depreciation, insurance, fees, utilities are all deductible. If you get in a jam, call the support number at Turbo Tax, someone will give you free advice. |