I bought a brand new construction home in Feb 2023 and looked for rental, and finally rented from July 2023 through the end of the year. I bought it in cash (no loan) for $600,000/- approx and land value was $100,000/- approx. And there were sundry expenses like appliances and landscaping etc., added. These appliances, rental management fees, land scaping and sundry expenses came to some $12,000. And rental income from July to Dec 2023 was about $15,000. Turbotax premium calculated the depreciation to be $25,000/- which is $10,000 more than the rent. And I have W2 income as well. Pl. clarify the following. Appreciate the help.
- After entering W2 data and the above, Turbotax shows some tax refund for me, because I might have paid via W2. However it is not clear if I ended up needing to pay any tax on my rental income. Am I to understand that since the depreciation is more than the rental income, Turbo tax wouldnt have put any rental income tax. Is that correct?
- Since depreciation is more than the rental income, do I lose the $10,000 credit I have from the depreciation for year 2023 is lost forever or does it get carried over?
- The Out of $12,000 that put towards improvements after purchase, some items like land scape etc., cost more than $2,500. I took all of $12,000 as one time instead of per annum thing. Is this good to do? OR do I do it per annum depreciation so that I don't lose at least part of excess depreciation of $10,000 I mentioned above?
- This property is in Maricopa County, Arizona. And since home is brand new, they have not given me the final supplemental assessment. Nor the county site gives land vaule. However county office does show 'cash value' for 2024 (this year) as well as 2023, with latter shown as land only. So I took this as the land value and entered it into turbo tax along with the purchase price for it to compute home depreciation for 2023. Is this correct way to do? I probably will not get new assessment for quite sometime
Pl. see if you could help.
regards
regards
