On Jan 20, 11:31 am, coloradotrout <coloradotr...[at]yahoo.com> wrote:

- quote -

Here's a quote:

Security deposits, kept – Do not include a security deposit in income
when it is received
if the taxpayer plans to return it to the tenant at the end of the
lease. However, if the
taxpayer keeps part or all of the security deposit during any year
because his tenant does
not perform under the terms of the lease, include the amount kept in
income in that year.
If an amount called a security deposit is to be used as a final
payment of rent, it is
advance rent. Include it in income when received.

- quote -

Yes, the 20k comes back to haunt you. It's called recapture. You can
google for it. I think the technical term is "unrecaptured section
1250 gain".

Residential property is depreciated over 27.5 years. It uses straight
line depreciation, and the mid-month convention.

There's also a limit on the rental loss you can claim. If you're not
actively involved in the rental, then you can claim no loss. However,
any loss gets carried over to future years or when you sell the
house. If you're actively involved and your AGI is low enough, then
you can claim a full or partial loss, and the balance gets carried
over to future years.

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On Jan 19, 7:06*pm, Russ in San Diego <russg...[at]gmail.com> wrote:
- quote -

Alright.. so I have a rental, and must:
1) declare rent as income (though the deposit is not - correct?)
2) offset income with expenses (interest only, insurance, state/county/
city property taxes, and the new one, depreciation, and other costs
for maintenance, etc)
3) file income forms for both KS and CO.

If the CO house's costs (interest, taxes, insurance, maintenance)
offset the rent, will I show no income for CO? I know this one year,
I will have a part year income in CO (mid Aug) and KS (mid Aug - Dec).

So I will real the publications.

Roughly, how do I figure depreciation? Is there some advantage to
using a higher or lower valuation? Let's say I sell for 400 and
bought for 300, so my gains is 100. If I had bought and sold in short
time, I'd not be taxed at all on the 100. But now let's say I sell in
2 years, so I have depreciated some amount. Do I base the
depreciation on 400? 300? some other. SLD would be like 400/40 = 10
per year ( I know I'm a bit off.. ). So in 2 years how does that 20K
come back to haunt me? Or does it really? Maybe not because I've
reduced my income by that 20K in those two years?

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

On Jan 18, 10:50*pm, coloradotrout <coloradotr...[at]yahoo.com> wrote:

- quote -

That word "can" caught my eye: Just so you don't make any mistake, you
may as well take the depreciation. Regardless of whether you take it,
your gain is supposed to be calculated as if you had done so. (And
even if it turns out to be a loss, you may as well have taken the
depreciation!)

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

Phil Marti wrote:
- quote -


1. Your rental is located in CO. As such you will have to file a
CO tax return for every year you have that rental. You must also
report the rental on your KS tax return. See page 16 of the KS
K-40 instructions for information on obtaining a tax credit for
taxes you paid to CO on income that is being taxed by KS.

2. You also need to be aware that if and when you sell the CO
home and you are still eligible for the main home capital gains
exclusion, you will not be able to exclude from income any amount
that is attributable to depreciation taken or allowed. See page
18 of IRS Pub 523: Business Use or Rental of Home.

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

"coloradotrout" wrote:

- quote -

You now have a rental. You report the income and expenses, including
depreciation, for the rental on Schedule E of the 1040. See Pub 527. It
sounds like you may also have moving expenses for 2008. See Pub 521.

You should consider hiring a preparer for your 2008 returns. Once you get a
rental set up it's pretty easy, but the front-end work is a major PITA.

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- > << 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 bought a new home in KS and kept my one in CO becuase the market was
soft and I had hoped within a few years I could sell it for more.

I'm renting the one in CO now.

For my '08 taxes what do I need to do?

I'm aware of the capital gains exemption for homes lived-in 2 of 5
years. So I have 3 years to sell my CO home (or move back, etc). I
assume it's in my best interest to keep that capital gains exemption
(unless, of course there is no gains! ouch!).

Anyway, I'm paying 2 mortgages, sets of taxes, and insurance. I'm
renting the CO home to cover my costs. I understand I can take the
rent as income and then deduct the interests, property taxes, and
insurance as costs. I also understand I can deduct depreciation.
But, again, I don't think I want to lose my capital gains exemption.

How do I sort our the best solution? Or so I have any options?

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >