polivanyi
New Member

For rental property overseas what expenses ( travel / maintenance / taxes ) can be deducted in 2018? Or all these expenses are included in standard deductions now?

 
DS30
New Member

Investors & landlords

Yes- If you have a foreign rental property and this property was available for rent during the year (even if it was not actually rented) then you can include the rental costs as part of the rental expenses in the year that the expenses were incurred. So rental expenses incurred in 2017 will be include on your 2017 income tax return and expense incurred in 2018 will be increase on your 2018 tax return,

These rental expenses have nothing to do with your ability to claim an itemized or standards deduction. These rental expenses are reported separately on a Schedule E attached to your return.

You can claim all these rental expenses (including maintenance, foreign property taxes and travel to inspect your property, etc.) just as you would a US rental. The main difference is that a foreign rental is depreciated over a 40 yr useful life (whereas domestic/US rentals are deprecation over a 27.5 yr life).

To enter rental information in TurboTax, log into your tax return (for TurboTax Online sign-in, click Here and click on "Take me to my return") type "rental income and expenses" in the search bar then select "jump to rental income and expenses". TurboTax will guide you in entering this information.

Here is a link that can provide you with helpful information related to your rental property 

TurboTax - Tips on Real Estate Taxes and Real Property

Investors & landlords

If my expenses are coming more than my rental income, why my tax return is not showing any credit. For ex- without entering rental income and expense, my tax return is $1000 refund. My foreign rental income is $5000 and expenses were $10000 so its negative -$5000. Still my federal refund is $1000. Am i missing siomething?

Carl
Level 15

Investors & landlords

That's no surprise. It is rare for long term residential rental real estate to actually show a taxable profit each year. In fact, it's more common for rental expenses to exceed rental income each year. Once your rental expenses get your taxable rental income to zero, that's it. You can't deduct any more of those expenses anywhere on your return. The excess expenses just get carried over to the next year.

So you'll notice with each passing year your carry over expenses will continue to increase. You can't realize those expenses as a deduction until the tax year you actually sell or otherwise dispose of the property. With each passing year you'll see your ever increasing carry over expenses on IRS Form 8582.