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re: Could you help me understand taxes and my rental property?
Posted on 3/11/16 at 12:15 pm to stevengtiger
Posted on 3/11/16 at 12:15 pm to stevengtiger
Property taxes in AL are ridiculous low. 200/month seems about right for an investment property with no homestead exemption.
I used turbotax too. The first year, you have to run through and set up the depreciation schedule. In subsequent years the depreciation should be automatically included AS LONG AS YOU KEEP USING TURBOTAX.
I'm in a very, very similar boat. Essentially zero cash flow, but don't let everyone tell you this is a terrible idea necessarily. It all depends on the specific area and your situation.
For me, I chose this route to let property values recover because I couldn't see paying 5-10K just to be able to move out of the house. 2 years later, property values boomed, and now we have 15K in equity. However, now is absolutely the right time for me to sell and pick up a better long term buy and hold investment property.
I used turbotax too. The first year, you have to run through and set up the depreciation schedule. In subsequent years the depreciation should be automatically included AS LONG AS YOU KEEP USING TURBOTAX.
I'm in a very, very similar boat. Essentially zero cash flow, but don't let everyone tell you this is a terrible idea necessarily. It all depends on the specific area and your situation.
For me, I chose this route to let property values recover because I couldn't see paying 5-10K just to be able to move out of the house. 2 years later, property values boomed, and now we have 15K in equity. However, now is absolutely the right time for me to sell and pick up a better long term buy and hold investment property.
2
Posted on 3/11/16 at 1:29 pm to AUjim
quote:
I'm in a very, very similar boat. Essentially zero cash flow, but don't let everyone tell you this is a terrible idea necessarily. It all depends on the specific area and your situation.
This has been my thinking for a while, but I think I'm going to sell. It was one thing to have my rental property HELP my tax return last year. This year, I had to pay $300 to the feds and $150 to the state, and I was getting money until I entered in my rental income. My family just can't handle surprises right now unfortunately.
My house is in the Alabaster, AL area, which has seen housing prices rise significantly since they decided to form their own school system. I was hoping to ride it out for a few more years to see how high the property value could get, but I guess if I can break even, that would be a whole lot better than losing $1400 (plus repairs and pest control and the home warranty monthly payment) a year.
Posted on 3/11/16 at 10:32 pm to AUjim
quote:
. The first year, you have to run through and set up the depreciation schedule. In subsequent years the depreciation should be automatically included AS LONG AS YOU KEEP USING TURBOTAX.
I know with the HR Block website, I usually had to input the depreciation info each year as though it were new info. Go through your steps again & make sure you didn't miss it. I nearly missed it one year and was panicking til I figured out what I'd done wrong.
As another person suggested, look at the Schedule E it generates to see what's going on.
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