Hello everyone, I am brand new to Turbotax. Here is my story and I have a few questions:
I recently retired from corporate life, and I am now concentrating on my “second” profession which has been fixing up old houses and renting them out. I have been doing this side activity for many years.
I have been using accountants to complete my taxes through the years, but now that I am entirely self employed, I am shifting over to Turbotax, since I have more time to handle these details plus I specifically want to cut back on accounting and professional fees.
In addition to three ongoing rental properties, I recently acquired two inner city brick townhouses for cash that I have been gradually fixing up over the last couple of years. My property taxes are low, and I have no mortgages on these two townhouses, so I have chosen to take my time in them preparing them for rental. These two properties were not available for rent during the prior two tax years.
For the prior two tax years (2017 & 2018), I noticed that the accountant did include my three original ongoing rentals on my schedule E but did not include any real mention of the recent two townhouses other than including my townhouse property taxes (negligible) on Schedule A Line 6 –Real Estate Taxes for the second of the two prior tax years they completed.
So 2019 is the first tax year that I am trying to complete myself, and I am currently entering my data into Turbotax Home & Business. Note that I began renting one of the two townhouses during the 2019 tax year, so its my understanding that I can now include the prior two years of expenses, meanwhile I continued to fix up townhouse #2 and so it was not yet available for rent in 2019.
A few questions:
>If I understand correctly, for the prior two tax years, I could not include the townhouses on my schedule E, because they were not yet available for rent, correct?
>But apparently it was okay for the townhouse property taxes to be included on my Schedule A Line 6 Real Estate Taxes? ( and I noticed that accountant included the property taxes in the second tax year but not for first year).
>So since 2019 is the first year that I am handling in Turbotax and now that the first townhouse has been rented in 2019, how do I handle the not-yet-recognized townhouse #1 expenses for the two prior tax years? Do I essentially roll up the two prior years of townhouse #1 expenses and then amortize over the next X years? Am I correct that the amortization period should be 15 years?
>The two years of townhouse #1 expenses total $15.5K and include:
Auto & Transportation= $4.4K
Legal & Prof fees=$1.9K
Clean & Maintenance=$0.6K
Repairs=$2.0K
Supplies=$4.3K
Property Taxes=$0.5K (this excludes property taxes noted in paragraph 5 above)
Utilities=$0.6K
Depreciation=$1.2K
So I just sum up these expenses and amortize over 15 years? Any thoughts and comments sincerely appreciated. Thanks!
