There are a few different lenses to look at tax savings with real estate professionals in the greater Seattle area. So we’ll touch on a few briefly and provide some noteworthy points. If you have questions beyond this, get in touch with us.

  • Personal Residence: Deductible Expenses
    • Mortgage Interest
    • Points
    • Qualified Mortgage Insurance
    • Real Estate Taxes
  • Rental Properties: Notes
    • Report Income when the income is received
    • Security Deposits are not included in income
    • Rental expenses are deductible in the year paid
    • Start deducting rental income whether or not there is a tenant
    • Do not deduct uncollected rent.

  • Rental Properties: Deductible Expenses
    • Advertising
    • Cleaning
    • Utilities
    • Insurance
    • Taxes
    • Interest
  • Rental Properties: Depreciation (cost segregation studies are great way to save tax dollars here.)
    • Building
    • Appliances
    • Carpets
    • Furniture
    • Fences
  • Real Estate Professionals: Common Deductible Expenses
    • Advertising
    • Professional Fees
    • Educational Materials
    • Business Travel Expenses
    • Business Entertainment
  • House Flipping: Notes
    • Can be taxes as either ordinary income or capital gain income
    • Ordinary treatment is ideal when you have losses
    • Capital Gain treatment is ideal when you have gains
  • Repairs versus Improvements: the following chart will demonstrate how some of the more common improvements/repairs are categorized.
Repairs Improvements
Painting Room Additions
Fixing Floors New Roof
Fixing Leaks New Plumbing
Replacing Broken Windows New Carpet

If you’d like a bit more guidance, give us a call we’ll address your specific concerns, and help you establish a tax plan that works for you.

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