Great video! My understating from your previous video is that loan (mortgage) acquisition costs (underwriting fees, appraisal fees .. etc) are amortized over the life of the loan. Where does that amortization go on schedule E?
@@TheTaxGeek Thanks. One follow up question: if I'm required to fill forms 4562 and 8825 for an LLC, is there a place on form 4562 to amortize the loan acquisition cost? there's no place for it under the depreciation section.
Great video! Possible to do a 1040nr video with sch E for a newly profitable rental property that has accumulated passive activity losses on F8582 from previous years? Cheers!
You may find the information you need in this video: ua-cam.com/video/yRAIiPCeW_0/v-deo.html Now if you're filing a 1040NR (non-resident return), the rules can be different and would definitely require some research before I could make a video.
Question: I have no property, no income, just expenses. Because I carelessly created a FL Real Estate LLC w the intention of collecting rent from my duplex/triplex. But unfortunately, I haven't been able to get a mortgage yet. So I don't have any property to mention in my Schedule E. I do however have a bunch of tallied upkeep expenses and the fees I paid for the creation of the LLC. ANY TIPS ON HOW TO FILE?
Without a property, you can't claim a rental property on a Schedule E. You might, however, be able to add the expenses you had for this year to the basis of the property when you eventually acquire one.
Thanks. Good video. Question: I just purchased a home to rent out and I’ve paid a moving company to move some furniture from my existing place to the rental property. Are those expenses deductible? If so, which line item on Schedule E? If they’re are not immediately deductible, can I at least include them in the cost basis for furniture and take depreciation on them over time?
Technically, any expenses you incur before you place the property into service are added to the basis of the property. That said, you probably wouldn’t get into trouble if you deducted the cost in the current year if you place the property into service soon after you purchased it. As for depreciating the furniture itself, the depreciable basis of the furniture is its fair market value as of the date you converted it, and depreciated under 5 year MACRS.
@@TheTaxGeek just a follow up if you don’t mind ….when you say add the cost to the basis of the property in one of your options, I assume you mean to the home basis(to be depreciated over 27.5 years) as opposed to the basis of the furniture, with the shorter depreciation schedule? Or maybe either one is acceptable?
Having little experience with online consumer tax software, I really can't give you any recommendations. All the major online online tax software (Turbo, Block, FreeTaxUSA) supports Schedules E and rental properties.
Hi. My mother in law lives in a condo I own rent free. It is in the same town. The condo is paid off, and we don't claim any deductions from it. Since there is no money changing hands, do we still have to file this form or some other form? Thank you.
Landlords are not required to 1099 anyone. They tried to change the law in 2010 but decided it's too burdensome for small landlords and scrapped the requirement for 1099s. Just like they pulled the plug on the $600 rule for Venmo and Paypal etc. They realized it's too burdensome for everyone to deal with the extra 1099s.
Unfortunately, I beg to differ, citing these sources: www.irs.gov/pub/irs-pdf/i1040se.pdf "Instructions for Schedule E (Form 1040)" www.rentdirect.com/blog/landlord-1099-requirements-what-is-a-1099-and-do-i-need-to-file www.nolo.com/legal-encyclopedia/do-landlords-need-to-file-form-1099-misc.html You may find earlier sources saying it's not necessary, but these are up-to-the-minute
@@TheTaxGeek The 1099 instructions say this form is for a "Trade of Business" to fill out. The small time landlord that is not a real estate professional is not considered a trade or business hence why they report rent received as passive income. The schd E instructions says "generally" you must file 1099NEC it doesn't say everyone "Must" so it's still a grey area.
6:13 I see the loss goes to schedule 1 and then line 8 of the 1040, so this loss is deducted from any other income she has for the year…Are we assuming she meets the 250 hour requirement or she is a real estate professional?
No I'm actually assuming for the sake of this video her AGI is within the limits where she can claim up to $25,000 in rental losses against other income, but either could be true. This is explained further in this video: ua-cam.com/video/yRAIiPCeW_0/v-deo.html
What if I don't own the property?, I rent it from someone else but at the same time I offer and rent the property on Airbnb. How do I declare that income? still Schedule E?
Yes, if you're subleasing the property, you would still report the activity on Schedule E. The rent would be an expense, and you would not be depreciating the property. If you stay in the property when it is not being rented, Vacation Home rules may apply, and you should, if you haven't already, watch my two videos on vacation homes, the first one linked here: ua-cam.com/video/SUVHECSX5r4/v-deo.html But AirBnB might have to be handled differently if you provide "substantial personal services" such as daily maid service or meals. In that case, the entire activity would be reported on a Schedule C business income.
It can, if there is no significant personal use of the property. If the property is both used personally and rented out, refer to this video: ua-cam.com/video/w6c0tAfqSBY/v-deo.html If there are significant personal services provided in the rental (such as maid service and meals), it's considered to be a business and reported on Schedule C.
If your rental property loses money (expenses exceed income), the loss may be used to offset some of your taxable income, resulting in a lower tax liability. If the property has a profit (income exceeds expenses), that will increase your taxable income and your tax liability.
Page 1 of the Schedule E is for rental/royalty property income. Unless you are in the business of renting property (i.e. it's not something you do on the side), it is not considered Qualified Business Income and there is no 8995 form to be filed. If you have partnership or S-Corporation income from a k-1 form, that IS qualified business income and that income goes on the 8995.
If your Modified Adjusted Gross Income is over $150K, you cannot use rental losses to offset other non passive income. Those losses accumulate until you have a gain you can apply them to. If you sell the property and you still have accumulated rental losses, they will help offset the capital gain on the sale of the property. ua-cam.com/video/yRAIiPCeW_0/v-deo.html
I have never seen such a clear video. thank you!!! cant wait to learn more from you!!
This video is extremely clear and well presented. Thank you!
Excellent video !! love how you laid it out and explained it all step by step
I'm glad you found it helpful!
You rock! Thank you for sharing
❤ This video is so simple to understand. 🙏 Thanks!!!
You're so welcome!
Extremely helpful. Thanks so much for this video.
You're very welcome!
It was a great explanations
Great video!
My understating from your previous video is that loan (mortgage) acquisition costs (underwriting fees, appraisal fees .. etc) are amortized over the life of the loan. Where does that amortization go on schedule E?
It can be included with depreciation expense on line 18, or broken out as a separate "other" expense on line 19.
@@TheTaxGeek Thanks. One follow up question: if I'm required to fill forms 4562 and 8825 for an LLC, is there a place on form 4562 to amortize the loan acquisition cost? there's no place for it under the depreciation section.
Thanks for the video it helped me a lot
You’re very welcome.
Great video! Possible to do a 1040nr video with sch E for a newly profitable rental property that has accumulated passive activity losses on F8582 from previous years? Cheers!
You may find the information you need in this video: ua-cam.com/video/yRAIiPCeW_0/v-deo.html Now if you're filing a 1040NR (non-resident return), the rules can be different and would definitely require some research before I could make a video.
Great and simple explanation. How do I enter solar pannels
The cost of the solar panels and the cost to install them needs to be depreciated just like the structure, over 27-1/2 years.
@@TheTaxGeek thank u
Excellent.
Thanks!
Question: I have no property, no income, just expenses.
Because I carelessly created a FL Real Estate LLC w the intention of collecting rent from my duplex/triplex. But unfortunately, I haven't been able to get a mortgage yet. So I don't have any property to mention in my Schedule E. I do however have a bunch of tallied upkeep expenses and the fees I paid for the creation of the LLC. ANY TIPS ON HOW TO FILE?
Without a property, you can't claim a rental property on a Schedule E. You might, however, be able to add the expenses you had for this year to the basis of the property when you eventually acquire one.
Thanks. Good video. Question: I just purchased a home to rent out and I’ve paid a moving company to move some furniture from my existing place to the rental property. Are those expenses deductible? If so, which line item on Schedule E? If they’re are not immediately deductible, can I at least include them in the cost basis for furniture and take depreciation on them over time?
Technically, any expenses you incur before you place the property into service are added to the basis of the property. That said, you probably wouldn’t get into trouble if you deducted the cost in the current year if you place the property into service soon after you purchased it. As for depreciating the furniture itself, the depreciable basis of the furniture is its fair market value as of the date you converted it, and depreciated under 5 year MACRS.
@@TheTaxGeekthanks so much!
@@TheTaxGeek just a follow up if you don’t mind ….when you say add the cost to the basis of the property in one of your options, I assume you mean to the home basis(to be depreciated over 27.5 years) as opposed to the basis of the furniture, with the shorter depreciation schedule? Or maybe either one is acceptable?
Good guy ! 👍 ❤
What are some online software that I can use for this for 1 rental property?
Having little experience with online consumer tax software, I really can't give you any recommendations. All the major online online tax software (Turbo, Block, FreeTaxUSA) supports Schedules E and rental properties.
Hi. My mother in law lives in a condo I own rent free. It is in the same town. The condo is paid off, and we don't claim any deductions from it. Since there is no money changing hands, do we still have to file this form or some other form? Thank you.
No. This is considered personal use of the property.
Landlords are not required to 1099 anyone. They tried to change the law in 2010 but decided it's too burdensome for small landlords and scrapped the requirement for 1099s. Just like they pulled the plug on the $600 rule for Venmo and Paypal etc. They realized it's too burdensome for everyone to deal with the extra 1099s.
Unfortunately, I beg to differ, citing these sources:
www.irs.gov/pub/irs-pdf/i1040se.pdf "Instructions for Schedule E (Form 1040)"
www.rentdirect.com/blog/landlord-1099-requirements-what-is-a-1099-and-do-i-need-to-file
www.nolo.com/legal-encyclopedia/do-landlords-need-to-file-form-1099-misc.html
You may find earlier sources saying it's not necessary, but these are up-to-the-minute
@@TheTaxGeek The 1099 instructions say this form is for a "Trade of Business" to fill out. The small time landlord that is not a real estate professional is not considered a trade or business hence why they report rent received as passive income. The schd E instructions says "generally" you must file 1099NEC it doesn't say everyone "Must" so it's still a grey area.
6:13 I see the loss goes to schedule 1 and then line 8 of the 1040, so this loss is deducted from any other income she has for the year…Are we assuming she meets the 250 hour requirement or she is a real estate professional?
No I'm actually assuming for the sake of this video her AGI is within the limits where she can claim up to $25,000 in rental losses against other income, but either could be true. This is explained further in this video: ua-cam.com/video/yRAIiPCeW_0/v-deo.html
What if I don't own the property?, I rent it from someone else but at the same time I offer and rent the property on Airbnb. How do I declare that income? still Schedule E?
Yes, if you're subleasing the property, you would still report the activity on Schedule E. The rent would be an expense, and you would not be depreciating the property. If you stay in the property when it is not being rented, Vacation Home rules may apply, and you should, if you haven't already, watch my two videos on vacation homes, the first one linked here: ua-cam.com/video/SUVHECSX5r4/v-deo.html But AirBnB might have to be handled differently if you provide "substantial personal services" such as daily maid service or meals. In that case, the entire activity would be reported on a Schedule C business income.
If I’m in a 50/50 LLC partnership and received a K1 do I still need to do a schedule E?
Yes, if you received any sort of K1, you need to report it on Schedule E, page 2.
Does this apply to short term rental?
It can, if there is no significant personal use of the property. If the property is both used personally and rented out, refer to this video: ua-cam.com/video/w6c0tAfqSBY/v-deo.html If there are significant personal services provided in the rental (such as maid service and meals), it's considered to be a business and reported on Schedule C.
So I have to pay taxes on a property I’m renting?
Yes, but only on the net income. Rents received - expenses
@@TheTaxGeek is there a method to minimize the taxes I’ll be paying on the net income .
By completing a schedule E, will this increase my return? Or will it work against me making me have to pay?
If your rental property loses money (expenses exceed income), the loss may be used to offset some of your taxable income, resulting in a lower tax liability. If the property has a profit (income exceeds expenses), that will increase your taxable income and your tax liability.
@@TheTaxGeek thank you for the response. Is it required by law to complete this schedule E if I am renting my home?
You are required to report all income, unless it is especially designated nontaxable.
When I do the schedule E and I have a LLC I put the income on the 8995 with my ein?
Page 1 of the Schedule E is for rental/royalty property income. Unless you are in the business of renting property (i.e. it's not something you do on the side), it is not considered Qualified Business Income and there is no 8995 form to be filed. If you have partnership or S-Corporation income from a k-1 form, that IS qualified business income and that income goes on the 8995.
I am just a landlord that own the properties in llc. I wanted my income to go in my ein. Also much do it cost to talk on the phone.
If I make more than 150k and had a rental loss, can I use it to offset my w2 income?
If your Modified Adjusted Gross Income is over $150K, you cannot use rental losses to offset other non passive income. Those losses accumulate until you have a gain you can apply them to. If you sell the property and you still have accumulated rental losses, they will help offset the capital gain on the sale of the property. ua-cam.com/video/yRAIiPCeW_0/v-deo.html
If your property is ready for rent and advertised but not rented in the year, can you still fill out a schedule E?
Yes, you can, as long as the property is ready to be rented and you are actively seeking tenants.