Is Home Insurance Deductible?
We have a 5-family, live in one apt and rent the others out. Can I deduct my home insurance on my taxes? Thanks for any help!
We have a 5-family, live in one apt and rent the others out. Can I deduct my home insurance on my taxes?
Thanks for any help!
smeyer. why do you have to complicate things for the OP with the nitpicking and not adding anything.
Typically in answering a post like this it’s an iterative process, trying to figure out exactly what the OP does or does not understand. Nothing I posted was incorrect.
TRY AND BE HELPFUL NEXT TIME. Just saying “get an accountant” is like saying “Because I said so” You must have had an awful childhood.
Take a look at Schedule E:
http://www.irs.gov/pub/irs-pdf/f1040se.pdf
Christopher- That’s exactly the kind of well-intentioned but misguided advice to avoid. You say “I don’t even think you need to prorate it. 5-family is “commercial”, not “residential” so you living in it or not shouldn’t make a difference. Deduct the insurance based on total income, not the number of units rented.” WRONG! The general rule with the subject property is: 4/5ths of expenses is deductible with the remaining 1/5th (personal use) not deductible. Yes, it is prorated. The aggregate rental income is the first line (schedule E) and the remaining allowable deductions are then subtracted from the rental income to bring the net either to a positive or negative. There are restrictions on when/if a negative is permitted to be deducted from personal income.
Dave
I don’t know why you would assume the OP knew anything if he didn’t know he could at least deduct some of the insurance policy.
You cite different schedules something he may or may not know.
You gave a specific way to calculate the deductions without saying its one of many whys.
You say the loses are deductible on one schedule without explaining they can be deducted elsewhere..
it seems you make a lot of assumptions and your first post never suggests that he talk with someone who knows the OP’s individual total situation.
the best suggestion is go to someone who does tax returns for a living and not rely on any of the posts here.
Even if OP knows the basics, still good to get an accountant. You want professional sign-off on such filings, and there is enough complexity — and perhaps enough options as to how to file — that professional advice is good. I would recommend Irwin Weissman of Weissman @ Rudnitsky.
Yes, there are a number of ways to calculate the percentage. I never said there were not.
These losses are different from any losses or gains reported on a Schedule D.
I assume the OP knows the difference between the mortgage interest personally deductible and that deductible against the rental income.
If the OP doesn’t know these basics, he/she definitely needs an accountant.
Dave there are more than one one to calculate the percentage. Number of units is one, number of rooms is two and square footage is three at least.
Real estate taxes are also deductible for individuals and businesses.
the best suggestion is to have a knowledgeable accountant look at this.
Also passive losses can be deducted from any other passive gain….
If you live in the building, the space that you occupy , and any costs associated with it (heat, insurance, etc) ARE NOT DEDUCTIBLE against the income.
If this renatl income is your SOLE income, accounting and IRS filing is different than if you have a job with a w-2 reported. In the letter case, all of this is reported on a Schedule E. If you make more than $150,000 in W-2 income, no loss can be claimed on the Schedule E.
If you are unfamiliar with any of this (including the amortization of the cost of the building), you need to get an accountant.
Double check with an accountant (never believe what you read on the interwebs)…
… that being said, I don’t even think you need to prorate it. 5-family is “commercial”, not “residential” so you living in it or not shouldn’t make a difference. Deduct the insurance based on total income, not the number of units rented.