investment residential real estate property closing

yonghuikim — Thu, 08 Aug 2019 14:04:44 GMT

I bought 3rd house that my son is using in 2018. I have my own house and one rental property. Can I have any credit or deduction on the 3rd that closing cost, repairs, and HOA costs?

Re: investment residential real estate property closing

Rainman12 — Thu, 08 Aug 2019 16:31:40 GMT

The only deductions you have for a personal use second home are Taxes and Interest. Other one-time costs (eg closing fees, repairs) can be added to Basis. No deduction for HOA fees.

Re: investment residential real estate property closing

Anonymous — Thu, 08 Aug 2019 16:43:41 GMT

in order to get the full benefit from the house your son is using (such as HOA, utilities, depreciation, etc) you would need to charge him full fair market rental.

A day of personal use of a dwelling unit is any day that it's used by:

A member of your family or of a family of any other person who has an interest in it, unless the family member uses it as his or her main home and pays a fair rental price
Anyone under an agreement that lets you use some other dwelling unit
Anyone at less than fair rental price

Was personal use more than the greater of 14 days or 10% of rental days
If yes
Was property rented less than 15 days (at FMV) then
1) If no
Then prorate expenses between personal and rental use. Personal portion of mortgage interest and taxes go to schedule A. Rental portion of these expenses are not limited to rental income. Other expenses are limited to remaining rental income. Note you must depreciate the property even though you might not get any current deduction. Carryovers of these disallowed expenses is allowed, but subject to the same limitations in following years. In many case these are not allowed until property is sold.
2) If yes

Treat as personal residence. Do not report rental income or expenses. Taxes and qualified interest are reported on Schedule A.

Note that there is an overall limitation as to how much taxes can be deducted ($10,000 unless MFS then $5000)

topic investment residential real estate property closing in Deductions & credits

investment residential real estate property closing

Re: investment residential real estate property closing

Re: investment residential real estate property closing