Hi.
I own an apartment (a co-op) that I rent out.
When i complete my taxes through turbo tax (but omit the deduction expenses), i owe aprox $800.
When complete my taxes through turbo tax but INCLUDE the deduction expenses, the amt I owe goes up to aprox $1800.
That doesn't make sense to me. Am I doing something wrong?
Thanks for any help you can give me.
Tom
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we can't see your return. renting is a passive activity and there are rules to the amount of losses that can be deducted. the limit is figured on form 8582 and shown on line 11. also look at form 6251 you may be subject to the alternative minimum tax.
if these don't show why your taxes are going up.
you'll have to compare your tax return with and without line by line and then post back in this thread what you found and maybe we can explain what is happening.
or you can upgrade to Turbotax Live to have a Turbotax pro look over your return.
It may be due to a reduction in the EIC (which is calculated on both earned income and AGI) or some other credit that is income-based.
What you are seeing is not at all uncommon. It's more common for rental property to operate at a loss every year on paper at tax filing time. When your taxable income goes down, there's a number of credits that get reduced or even eliminated because you don't qualify. You really can't get the whole picture of everything until after you have completed your tax return in it's entirety and are ready to file it. In the process, that refund/due amount is going to be all over the place. Remember, the program can only work with the numbers it has at "this" specific and explicit point in time.
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