Seth wrote:
- quote -

Not unless that fair market value at that time was less than
the accrued basis.

Which could happen of course. Good point, Seth.

ChEAr$,
Harlan Lunsford, EA n LA

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

seaweedsl wrote:
- quote -

Only what you spent for materials; nails, glues, boards,
plywood, etc etc.....

You might try to reconstruct records by contacting suppliers
for duplicate invoices; depending on the lapsed time of
course. If not, sit down now and to the best of your memory,
write down what and how much and for what did you spend
money. That record is better than nothing, and MAY; I
repeat MAY, hold up under audit, IF you get audited.

Yes, IRS does sometimes accept your word.

ChEAr$,
Harlan Lunsford, EA n LA

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

seaweedsl <feui8c$87t$1[at]panix2.panix.com> wrote:

- quote -

If he lived in it for those 10 years, does the value when it
was converted from residence to rental matter?

Seth

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Harlan Lunsford <hnslunsf...[at]bellsouth.net> wrote:

- quote -

And if I have no reciepts and did all the work myself?

Steve

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

- quote -

Briefly, take purchase price, subtract value of land at that
time. Now add to this cost, we call it basis, costs of
improvements that you paid for, materials and labor, but NOT
supposed value of your time. Even is house is now worth
60,000$, that's not the real basis of it for depreciation
purposes as you can readily tell.

Then, starting with the month you started renting it out,
divide basis by 27.5 years which gives you annual
depreciation, but adjust for partial year in first year if
necessary, pro rata.

ChEAr$,
Harlan Lunsford, EA n LA

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

- quote -

You must determine your cost basis by starting with the $6
you cite, then adding the actual expenditures (for which I
assume you have receipts or records over the years) -- and
the _total_ will be your cost, as of the time you began
renting it. That will start your depreciation.

Now, as a part of your "reentering" process, as you prepare
returns for the years previously missed, you can include not
only depreciation but also expenses incurred for repairs
(which would not be eligible for consolidation in the cost
basis -- so be careful to distinguish the plumbing visit for
a leak or stoppage, as opposed to the re-plumbing of a
remodeled bathroom, for example).

However, it is always fair to add to your cost basis
anything which is a genuine improvement -- such as a room
addition, or new air conditioning system.

As was previously noted, these answers are inevitably a
"gross simplification of a complex topic," and you should
seek further details in Pub 527, Residential Rental
Property. See especially the sections on depreciation.

Bill

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

- quote -

Here is a simplistic answer. You bought the house for $6K.
That was your original basis. You put on a new roof etc for
say $10K. Your basis is now $16K. You begin to rent and so
you depreciate based on $16K and eventually the book value
becomes say $14K. Now you fix up the kitchen for $5K. Basis
becomes $19K and you begin to depreciate again.

Just a lay person, you may have to depreciate the $14K and
the $5K separately.

Come to sell. The book value is now say $16K. You get
$176K. You have a capital gain of $150K. Pay the tax before
the Dems eliminate the 15% rate.

You need to line up your improvements, etc and either study
the tax code or see a professional.

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

- quote -

OK. Good points. Got my attention. How does depreciation
work? I bought the house for nothing ($6K), wrecked. Over
ten years, I rebuilt it myself and now it's worth probably
10-15x that.

Steve

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

seaweedsl <fepdqq$lo8$1[at]panix2.panix.com> wrote:

- quote -

There shouldn't be.

- quote -

http://www.irs.gov, click on "More Forms and Publications"
then "Previous years" then the appropriate year.

Seth

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

seaweedsl wrote:
- quote -

1. no problem in filing past returns, even if not required.
2. go to IRS.gov and check around. If not directly downloadable,
you may call 18008293676.

BTW, simplicity is a virtue and we need more of it, however
you do need record deprecation each year, for when you sell
the property, you will have to pay tax on all that
depreciation you took in previous years, whether or not it
benefited you. I'm assuming you'll sell the property in
the future for more than you paid for it (your basis in the
property.)

ChEAr$,
Harlan Lunsford, EA n LA

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

- quote -

When you eventually sell the house, you are going to be
taxed on the depreciation that you could have taken, whether
or not you actually took it. So you should take it. (This is
a gross oversimplification of a complex topic.)

- quote -

No. As you noted in your first post, if you owe any tax, you
will be charged penalties and interest.

- quote -

http://www.irs.gov/formspubs/article...=98339,00.html

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Avrum Lapin <avrum...[at]verizon.net> wrote:

- quote -

Exactly! I've long missed out on affordable health care,
benefits etc, due to no provable poverty. But I have not
cared because I'm intentionally poor and don't feel entitled
to anything.

But now, I want to bring my foreign wife to the US and need
to show returns. Possibly 3 years past.

And later on, I'll likely inherit money and properties and
will need to be engaged with the system then. Seems best to
start now and keep it going, just for the forms.

- quote -

OK. Gotcha. 1040 plus E.. And no, I have no intention of
getting into expenses and depreciation. I want the freedom
of simplicity. That's worth something to me.

Thanks for your input. It's nice to get some orientation
with an "expert".

I still have a couple questions though -
1) Any problem filing for 2006 or further back now, in
Oct-November 2007 ?
2) Where to get past forms?

Cheers,
Steve

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

seaweedsl <seaweedsteve[at]gmail.com> wrote:

- quote -

In theory your income is below the need to file threshold
but there are situations where you have to produce copies of
past returns and it easier to produce rather that argue that
you didn't have to file. (whether you actually filed is
another story).

Every year when I do Tax Counseling for the elderly I get a
few self-employed people who are below the filing threshold
who request filing so that they can have a piece of paper to
show to justify their subsidized rent

1040ez can not be used for rental income. You need a 1040
(long form) and a Schedule E. Having said that did you have
any expenses? Are you going to depreciate?

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

I've been out of the US tax system for many years, I believe
legitimately.

But now, I am going to need to show tax returns for some
other governement business and want to start filing right
away for a few previous years- maybe 1-3 to fill in the
gaps. From now on, I'll just file, to keep the papers in
order. And I may start working again this year.

My income for the past years has been solely from renting my
house here in the US while I live in Mexico. I have been
able to subsist on that rental plus an occasional cash gift
from my parents.

Rental income has been about $4000 per year. The house
rented is my residence and I still maintain it as my mailing
address etc. In other words, it's not my business, it's
just sort of sub-let for the time being.

My idea is to simply get some past 1040 ez forms for recent
years and fill them out, send 'em in. From a cursory
reading through the tax forms, I don't believe that I will
owe anything, thus no penalties or interest?

Any thoughts? Advice ? Pitfalls to watch out for?

And where would I get old forms?

Thanks for any help.

Steve

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >