Taxes are on everyone’s mind this time of year. Why not think about the tax deduction benefits that can come your way through rental properties?
Interest: Common examples of interest that landlords can deduct include mortgage interest payments on loans used to acquire or improve rental property.
Depreciation: The actual cost of a house, apartment building, or other rental property is not fully deductible in the year in which you purchase or pay for it. Instead, landlords get back the cost of real estate through depreciation. This involves deducting a portion of the cost of property over several years.
Repairs: Good examples of repairs that can be deducted include repainting, fixing gutters, floors, leaks, plastering, and replacing broken windows. Nothing excessive or unreasonable is the thing to keep in mind.
Insurance: You can deduct the premiums you pay for almost any insurance for your rental activity. This includes fire, theft, and flood insurance for rental property, as well as landlord liabilty insurance.
Legal and Professional Services: Finally, you can deduct fees that you pay to attorneys, accountants, property management companies, real estate inveestment advisors, and other professionals, depending on how large your rental portfolio is.