- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Investors & landlords
I have a rental house managed by a hired company. I don't spend 750 hours a year or more than 50 % of my time to manage it.
Doesn't matter. The rule is not that you personally have to spend more than 750 hours managing it. If you pay a third party to manage the property for you, and you can show that you paid for more than 750 hours of their time to manage your property during the tax year (which I seriously doubt you can) then you claim what you pay for.
I would assume the rental manager charges you the standard 10% of the rental income as their management fee. If the rental company includes the "TOTAL" rent in box 1 of the 1099-MISC they sent you, then you can deduct that management fee in the rental expenses section. There's a box in that section specifically and explicitly for management cost.
If box 1 of the 1099-MISC shows what they paid you AFTER taking their management fee out, then you can NOT deduct the management fee on the SCH E.
If you paid for any rental expenses in excess of the management fee and the management company with held it from your "normal" monthly payment, then your ability to claim it depends.
If they included the with held amount in box 1 of the 1099-MISC, then you can claim it. If they did "NOT" include the with held amount in box 1 of the 1099-MISC then you can NOT claim it.