Answering The Question Of Deducting Mortgage Payment From Tax ...

As a landlord, you will want to make sure you take advantage of all of the tax benefits you can receive by owning a property. There are many other deductions than just the obvious ones. Do not go for the obvious here ? we are referring to miscellaneous reimbursements to renters, lease cancellation expenses, etc. Make sure you are taking advantage of all of the expenses you have.

Interest. You may be aware that the mortgage interest payments made on the loan you used to purchase your property are among your deductibles, but there are others you can deduct as well, such as the interest charged on credit cards you have used to make improvements or to hire services for home improvement, or the interest charged on any property-related improvements or renovations. Be aware of these numbers, because interest can take up a healthy amount of your deductible expenses.

Depreciation. The cost of your property is recovered over time through depreciation. The moment you have been in ownership of the property for two years, then you can claim depreciation that would cover a good 27.5 years.

Repairs. Your list may also include the cost of repairs done to and on the rental property, provided they are deducted in the same year they are done. This could mean a number of things, including, but not limited to a new paint job, repairing windows, leak repair, new flooring, new wall plastering, etc. To qualify, you have to make sure the expenses are ordinary expenses in the cost of running the rental property, reasonable costs and not capital improvements.

Travel. No, this does not mean your recent getaway to Florida or Cabo ? we are referring to travel expenses incurred when collecting rent, resolving tenant issues and disputes, attending landlord cooperative meetings or doing repairs on a rented property. If you have to visit service providers such as plumbers or electricians, you can deduct that as well. Finally, hotel expenses incurred when traveling a distance are considered part of this deductible category.

Home Office. If you use a room in your home as an office to conduct the business of running your rentals, that portion of your own rent or mortgage is deductible.

Losses. Losses can be classified as deductions in most cases. These would be losses due to natural circumstances like fires or floods. Naturally, the only part that can be deducted would be the non-reimbursed part if you do have insurance.

Insurance. The premiums you pay on your property insurance is deductible. You will probably have flood, fire, theft and liability insurance on the property.

Services. Any kind of fees you pay for services related to the property are deductible, such as attorney fees, accountant fees, payments to property management companies, real estate investment advisors and other professionals who provide you services to properly manage your rental property.

Some expenses that you may have are not deductible, however. A loss of rental income due to vacancy, for instance, is not deductible, and any modifications made that are outside the bounds of capital investment, such as new rooms, a new roof, etc. are not deductible either.

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Source: http://www.eftreport.com/2012/03/09/answering-the-question-of-deducting-mortgage-payment-from-tax/

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