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"..claim those losses to offset other income" Be careful. If you are thinking of renting out a house remember you need to return a large portion of that deprec
by ransom1538 5y ago
"..claim those losses to offset other income"
Be careful. If you are thinking of renting out a house remember you need to return a large portion of that depreciation back to the IRS. It isn't free money. Even professional landlords don't know about this.
https://homeguides.sfgate.com/paying-back-depreciation-rental-property-42080.html https://homeguides.sfgate.com/paying-back-depreciation-renta...
- Spooky23 5y agoAnyone with a competent accountant will avoid that. You can invest in like investments and avoid recapture. There’s a whole industry around this generation of “free money”. The owner of a Hampton Inn / Fairfield Inn, etc, makes more money on selling off accelerated depreciation than on renting rooms.
- ransom1538 5y agoYes. There is a 1031 exchange. That is when you purchase another like kind investment property. I should have stated during a 'sell'. Lots of landlords actually need to sell homes. So no, a competent accountant will not avoid it during a sell.
- Spooky23 5y agoOh totally agree there, accountants aren’t magicians. But planning is part of accounting competence. For example, you could avoid this issue by not deducting, or do a like kind purchase if something that produces income more passively. If a landlord just bungles around without knowing what they are doing, recapture taxes are probably one of many issues they are facing.