If I paid off my commercial property in a different year from when I started renting and claiming it, do I report the interest as part of the cost or do I report it in the interest line?

[amac_red77]

I bought a commercial property in 2006.  It's paid off.  Never claimed the interest, improvements, or anything on it.  I started renting it on 2021.

When I enter the property cost, do I include everything I paid for it including the interest?  Do I enter the interest separately?  Or can I even claim it at all?  Thanks for any help!

[Mike9241]

Because the information you provided is incomplete to best answer your questions what was the commercial property used for when you acquired it in 2006? from 2006 to 2021? however, I really think you need the services of a tax pro 

[amac_red77]

I used the commercial property for storage from 2006 to 2020.  Starting 2021, I rented it out - the whole property.  My bookkeeper at the time didn't report it, not from 2006 to 2020.  I just turned in my receipts at the end of the year.  I signed what I got handed over.  He didn't depreciate anything and I'm fixing all of that right now.  Turbo Tax has been a God send.  I'm learning about all these deductions I have that he never claimed.  Now for 2021, he didn't turn it in.  I'm filing late but I'm filing.  I want to report my rental income but I don't know what I can deduct or how though the Turbo Tax agents can help, it's hit and miss.  I paid for the Pro service too.  I tried a CPA and they want me to do all this LLC stuff that I don't think is necessary.  Ideally I would have liked to declare everything in those years but the old stuff is too old to amend.  To be honest, I've been getting more help in the community than anywhere else.  So here I am.

[Critter-3]

Ok ... you said you used it for "storage" ... of what and why ?   Was it for personal use storing personal property? 

[amac_red77]

To Critter:

Although you're diverting form answering where the interest goes at all, I'm answering for others who reference this later.

I have a construction company.  I used the property as an office for some but not constant dispatch, and mainly to store containers, trailers, machinery, materials, and supplies.  I work mainly out off my truck.  So no.  It wasn't used for personal purposes.  I know better than to try to claim personal use property for business purposes.  That's asking for an audit.

To others / soap box rant:

1. Read the IRS publications and other articles to decide for yourself if you can claim what you're looking for.  In my case, I'm trying to make sure I declare the full cost of the commercial property that's already been paid off.  This is important because if I just roll the whole interest into the cost I paid for the property, it will depreciate at 27 years.  But if I declare it as a line item, it's a lot of interest.  And most importantly, I don't know if I can.  The publications I've read so far don't have any mention on properties that are already paid of.  They have plenty of information on properties that are still being paid giving the green light.

2.  Turbo Tax and the Turbo Tax community tend to err on the side of the IRS.  If you really don't know, use a CPA or a tax preparer professional.  But if your CPA isn't familiar with your industry or is weak in other areas, then they can do more harm than good.  For me, one of the CPA's I tried that was awesome for stocks but didn't want me declaring my kid from a previous marriage even though I have Form 8332.  I would have missed out on a credit.  Others might try to offer you services you don't really need.  Again, for me, I carry good insurance.  Too many pros have tried pushing for me getting an LLC per property to limit the exposure asking between $1,000 to $1,500 a pop plus filing fees.

So be suspicious of people who try to sell you things you don't need.  I got burnt too many times by bookkeepers and tax preparers thinking that just because they have a license, things weren't going to go south ways for me.  Remember at the end of the day you're the one being held responsible for the information you're submitting.

My point is.  Turbo Tax is great if you can make the time to read and ask questions.  Once in a while you'll get stumped like I'm getting stumped here.