hope we got some clutch cpa in the house? Trying to settle a debate with my folks. They have a rental house that used my name for financing/mortgage purpose only, but all the rental income go to them and property taxes and expenses they take care. Who should claim this rental property on their tax return? this house is in sugar land.
You claim the property on your tax return as you are the legal owner. You are unable to claim tax reduction for property taxes and mortgage insurance since you did not pay for them, your parents did with the rental income. Your parents need to realize the profit minus expenses on their tax return. You might be able to claim mortgage interest because the 1098 is going to go to you. That's off the top of my head, could be wrong. I can find out a definite answer Wednesday.
Can you guys recommend a good CPA, or tax office.. I haven't done my taxes yet Sorry for the last minute request guys. Somewhere near Sugarland,Mo-city, Stafford is preferred.
If he's not recording any profits on the property, there's no profit to deduct on his schedule c. Therefore, what deductions will he be eligible for? Also, if the IRS did an audit, they would see that he did not pay for the taxes from his bank account. Therefore, he is unable deduct an expense that was paid for by someone else.
"profit to deduct on schedule c"? What does that mean? Gains and losses from rental properties are reported on Schedule E. If rental expenses exceed rental incomes, then you can take a loss up to $25,000. This loss can be used to offset your ordinary income. Even if your rental property generates positive cash flows, you could have a tax loss since your rental expenses would include depreciation which is a non-cash expense. If the IRS conducted an audit (which they wouldn't), the burden would be on them to prove that asianballa didn't pay the property tax. And who cares if his bank account doesn't show a property tax payment? "Mr. Tax-man, my parents paid the property tax, but it was a gift to me. And since the gift was less than $14,000, it's not a taxable event." If asianballa is claiming the rental property on his tax return, there's no reason for his parents to say he didn't pay the property tax. That would essentially be them taking money out of asianballa's pocket and giving it to the government. I doubt his parents are that cold-blooded.
I'm no tax expert, but I would advise against bringing the World Health Organization into your federal return. That might get flagged.
Stopped reading there. OP, I am a tax expert (I did my own taxes this year on TurboTax) and I fully recommend using the World Health Organization to get a bigger refund.
This may help. It is not exactly your situation (even in reverse), but it has a checklist of who is the 'equity' owner of the house (one item is who enjoys the 'rents'). http://double-taxation.com/2012/03/...the-mortgage-who-gets-the-interest-deduction/
You're right, I forgot about the gift of $14,000 per parent to child that is nontaxable. Basically he can take the rental property as a loss (property tax, insurance, interest) against his income? Sweet deal for asianballa imo.
I doubt he can get the deduction i mean he has to have a MAGI of less than 100,000. then again his folks are paying for the stuff.
