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re: If I rent a house why am I subsidizing your mortgage deduction
Posted on 5/24/18 at 1:49 pm to KiwiHead
Posted on 5/24/18 at 1:49 pm to KiwiHead
From those kind of questions/responses from him...you do not want him as a renter. He seems disgruntled already and feels the system owes him something just because he can't take advantage of the way the law is written.
Let him go rent an apartment and have that argument with the apartment complex owner/property owner.
Let him go rent an apartment and have that argument with the apartment complex owner/property owner.
1
Posted on 5/24/18 at 1:49 pm to go ta hell ole miss
insurance costs
property tax
risk of property value fluctuations
loss on real estate transaction fees
closing costs
cost of maintaining home and repairs
risks of paying deductibles when things happen
risk of liability of owning the property
jesus christ nancy
property tax
risk of property value fluctuations
loss on real estate transaction fees
closing costs
cost of maintaining home and repairs
risks of paying deductibles when things happen
risk of liability of owning the property
jesus christ nancy
Posted on 5/24/18 at 1:52 pm to kjp811
quote:
Is he paying interest on the rent? Is he paying his landlord's property tax?
If you are paying rent are you not in someway also covering the landlord's property taxes and insurance bill at least indirectly?
If he has a note on it, are you not covering his interest as well? Plus if memory serves a landlord gets no special breaks on the rental property either, his interest payments are not wholly deductible to the extent his primary home is .....he does get to deduct costs associated with up keep and his insurance bill is higher?
From a tax fairness point, I could not give a good answer. Like I said, if his situation was that he was going to be stationary for a while, he would buy, but he's a specialized contractor and moves around
Posted on 5/24/18 at 1:53 pm to KiwiHead
1. Any business that purchases equipment or supplies can deduct the interest charged for the purchase even if its credit card interest.
2. He is not subsidizing your deduction. If mortgage deductions were not allowed for investment property then the rents most likely would have to be higher and less property would be constructed for rentals (i.e. larger apartment complexes) which would result in less available rentals and higher overall rents.
2. He is not subsidizing your deduction. If mortgage deductions were not allowed for investment property then the rents most likely would have to be higher and less property would be constructed for rentals (i.e. larger apartment complexes) which would result in less available rentals and higher overall rents.
Posted on 5/24/18 at 1:53 pm to KiwiHead
quote:
If you are paying rent are you not in someway also covering the landlord's property taxes and insurance bill at least indirectly?
If he has a note on it, are you not covering his interest as well?
none of that is relevant nor always true. fair market rent value does not always correlate to a person's note and cost of a home owned.
Posted on 5/24/18 at 1:54 pm to atxfan
quote:
He's paying for the flexibility of being able to move with minimal strings attached and minimal liability. He's over thinking things. Tell him to hire a good accountant that he can pose these questions to and who can help him keep more of his money.
That's what I did
Posted on 5/24/18 at 1:54 pm to KiwiHead
You really didn’t have an answer for him?
Posted on 5/24/18 at 1:55 pm to KiwiHead
Tell him there are risks to home ownership such as property depreciation in value. He doesn’t have that risk despite potentially causing depreciation by being a poor tenant. It all works out in the long run and if he can’t own his own home because of his work he could buy a rental property himself to then deduct the interest on his personal property.
Posted on 5/24/18 at 1:57 pm to NASA_ISS_Tiger
quote:
From those kind of questions/responses from him...you do not want him as a renter. He seems disgruntled already and feels the system owes him something just because he can't take advantage of the way the law is written.
Let him go rent an apartment and have that argument with the apartment complex owner/property owner.
Dude was just raising a question..
Posted on 5/24/18 at 1:58 pm to OweO
Are you questioning the conventional wisdom of the OT baw?
Posted on 5/24/18 at 1:58 pm to KiwiHead
As a renter, he also doesn't have to come out of his pocket to pay for repairs when the A/C or water heater goes out.
Posted on 5/24/18 at 2:01 pm to Tiger Prawn
Or deal with the petty complaints and general dumbassery that I’ve seen with some tenants.
Posted on 5/24/18 at 2:01 pm to KiwiHead
What a dumb question. If you don't like the rent price, then live somewhere else. It's supply and demand 101. Property owners will charge what the market allows them and it has nothing to do with a tax deduction.
Posted on 5/24/18 at 2:02 pm to KiwiHead
It’s all factored in to the market rate price of his apartment.
Posted on 5/24/18 at 2:04 pm to yellowfin
quote:
You really didn’t have an answer for him?
Other than that as a landlord ( which I am not) I assume an inordinate percentage of the risk. From a fairness point, I didn't have a good one....why can't he deduct some of his rent?
I think his point has some merit though, all of what the board says is good , with a few exceptions, I think his bigger issue is that if he rents a house and pays the market rent, and does o on a timely basis, why can he not get some sort of break in the tax code? He makes good money, pays Federal tax each year .....writes a check.
Posted on 5/24/18 at 2:06 pm to KiwiHead
quote:
Other than that as a landlord ( which I am not) I assume an inordinate percentage of the risk. From a fairness point, I didn't have a good one....why can't he deduct some of his rent?
I think his point has some merit though, all of what the board says is good , with a few exceptions, I think his bigger issue is that if he rents a house and pays the market rent, and does o on a timely basis, why can he not get some sort of break in the tax code? He makes good money, pays Federal tax each year .....writes a check.
Again, the government wants to encourage home ownership. If I knew I was going to live in one spot for at least 5 years, I would buy something too but that currently isn't in the picture.
Posted on 5/24/18 at 2:06 pm to Mingo Was His NameO
quote:
Not necessarily because it's an itemized deduction.
Eta: as a renter he also has no risk of ownership so he gets that over the owner.
Itemized deductions won't be very common for most with the new tax laws. I've itemized for the past 7-8 years but likely won't next year
Posted on 5/24/18 at 2:07 pm to KiwiHead
quote:
If you are paying rent are you not in someway also covering the landlord's property taxes and insurance bill at least indirectly?
If he has a note on it, are you not covering his interest as well? Plus if memory serves a landlord gets no special breaks on the rental property either, his interest payments are not wholly deductible to the extent his primary home is .....he does get to deduct costs associated with up keep and his insurance bill is higher?
From a tax fairness point, I could not give a good answer. Like I said, if his situation was that he was going to be stationary for a while, he would buy, but he's a specialized contractor and moves around
I think you’ve kind of answered the question already. He’s paying extra not to be tied down in a house.
The deductions are there to incentivize people to buy because communities with homeowners are generally better than communities with renters. I get that he can’t because of his job, but presumably his job should compensate him for not being able to put down roots.
Posted on 5/24/18 at 2:07 pm to KiwiHead
It's called an investment for a reason. God forbid his landlord make a profit on it.
Posted on 5/24/18 at 2:10 pm to SUB
quote:
What a dumb question. If you don't like the rent price, then live somewhere else. It's supply and demand 101. Property owners will charge what the market allows them and it has nothing to do with a tax deduction.
I see reading comprehension is not your strong suit, it's not about the price of the rent, it's about what he would perceive as fair in terms of the tax code.
You "own" a house, you get to deduct a good portion of what you pay to the bank and therefore lowering your tax exposure. If he rents, he gets no benefit and has to write a larger check each year to the federal government even if he makes the same amount of money as you . Why do you get the break and he gets to pay more in taxes? That's his gripe
Guy is a flat taxer obviously
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