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Not-for-profit Rental

Having a dispute with a tenant or landlord? Rental Law discussion

Not-for-profit Rental

Postby atworth49 » Tue Dec 06, 2016 6:33 pm

s About Taxes)/not-for-profit rental Advertisement Expert: John Stancil, CPA - 8/10/2009 If a house is being rented simply to hold the property, the rental activity loses money, and is treated as "not-for-profit", can the owner choose to not take the depreciation deduction and avoid the need for depreciation recapture upon sale?

Thank you.
atworth49
 
Posts: 37
Joined: Thu Mar 31, 2011 3:22 pm

Not-for-profit Rental

Postby Jabez » Wed Dec 07, 2016 1:01 am

Jon,

Thanks for your question.

If you are completing Schedule E, you must take depreciation.  If you don't take depreciation, the IRS will reduce your basis anyway and you will still have the depreciation recapture.  The IRS term for this is depreciation "allowed or allowable," which simply means if you are supposed to take depreciation, they reduce your basis whether you did or not.

If it is truly a rental not for profit, you can skip Schedule E and report the rental income on line 21 as other income.  You can the deduct the mortgage interest and property taxes on Schedule A.  Any additional rental expenses up can be deducted as miscellaneous itemized deductions.  However you can only deduct expenses up to the amount of income, no loss is allowed.

Hope this helps.

John Stancil, CPA
Jabez
 
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Joined: Sat Feb 15, 2014 6:08 am

Not-for-profit Rental

Postby Eaton » Wed Dec 14, 2016 11:15 pm

s About Taxes)/not-for-profit rental Advertisement Expert: John Stancil, CPA - 8/10/2009 If a house is being rented simply to hold the property, the rental activity loses money, and is treated as "not-for-profit", can the owner choose to not take the depreciation deduction and avoid the need for depreciation recapture upon sale?

Thank you.
Eaton
 
Posts: 44
Joined: Wed Jan 01, 2014 10:31 pm


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