Top 10 Tax Write Offs for Rental Property: 2024 Deductions

My Top 10 Tax Write Offs for Rental Property. Being a property owner is a great way to build wealth! And I want to make sure that everyone knows the amazing tax deductions for real estate investors. No one is talking in-depth about these tax deductions for rental properties, learn it all here.
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Now before you get started, I just want to clarify that you may hear me use tax deductions and tax writeoffs interchangeably in this video and others.
Guys, its basically the same thing. At the end of the day, what we're trying to accomplish is to make sure that we are using all the legal ways to reduce our taxable income that we report to the IRS.
Alright, so when it comes to tax write offs for rental properties you need to know there is a difference between getting tax deductions as an ACTIVE real estate investor and a PASSIVE real estate investor
Because the IRS treats passive income and active income differently for tax purposes. Lets dive a little deeper into this during the video.
Video Outline for Tax Write Offs & Deductions for Rental Property:
Intro: (0:00)
Tax Write Offs vs Tax Deductions: (1:31)
What is passive income from real estate for tax purposes: (2:22)
What is active income from real estate for tax purposes: (3:00)
Active vs Passive income tax example: (4:15)
Real estate by Income deduction: (4:57)
Write off #2: (5:43)
Write off #3: (6:54)
Write off #4: (8:30)
Write off #5: (9:09)
Write off #6: (10:43)
Write off #7: (11:27)
Write off #8: (12:08)
Write off #9: (12:45)
Write off #10: (13:54)
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Disclaimer: The information provided in this video is for entertainment purposes only and is not meant to take the place of professional legal, accounting, or financial advice. If you have any legal questions about this video or the subjects discussed, or any other legal matter, you should consult with an attorney or tax professional in your jurisdiction (i.e. where you live).

[@LYFEAccounting]

Watch this next: "How to Buy Rental Property with an LLC" - kzbin.info/www/bejne/a5WbgHp9qtaWm5Y

[@Bluewh174]

What closing costs can be the write off in LLC?

[@k.suliman1010]

It is the same for personal but if you use S Corporation you don’t pay the 9% Social Security

[@lourdesrios7186]

Hi! I'm confused about tax deduction #1... how do i qualify?

[@guneetchadha6838]

Great video with valuable content. Thanks for sticking to the point and really appreciate the text graphics that highlight key examples of these write off's. Keep'em coming 👍🏘🏡

[@sreevandana5482]

This is excellent info here. Few things are completely new for me and few things got clarified. Thanks 😊👍

[@Spud_E_Buddy]

This video was gold…thank you! I’ll be reaching out to you in January when I start my LLC and look to acquire my first property.

[@cd4683]

That $500k and above detail always gets left out. It's a massive detail for the vast majority of people. Thank you for giving the details.

[@raymondlai4173]

Thank you. I think the contents you people made are great!

[@adrianacardenas5948]

I just found your videos. And they're amazing! So, so helpful! Thank you so much for this great information. God bless you.

[@breew2968]

As someone who is learning about real estate investing, this was a great break down of what expenses and write offs I should track. Great job! 👍🏾

[@LYFEAccounting]

Thanks so much for saying that and thank you for watching

[@pinkribbonskies5731]

This is great, id love to see more videos in the future diving more into this specific topic. Thank you so much for this!!

[@Journey4Vitality]

Thank you, this is the best video on KZbin about Selling A Rental. Thank you for putting all this information together.😊

[@olafrazo2558]

I just found this channel and just wanted to say this is awesome! I just finished my undergrad in accounting and working on my masters in accounting now!

[@LYFEAccounting]

Congrats! Keep pushing for greatness, these videos may help you alot one day :)

[@adrianamiamirealtor2119]

Thank you so much, that was very clear and educative.

[@dovetales3]

This is fire! 🔥🔥🔥

[@godbyjrotc]

Wow, I've been looking for videos talking about depreciation on capital expenses. Very well described. I'm an AirBnb landlord (most likely passive) and I've found that I'm not eligible for Section 179 deductions and total deductions under the Tax Cuts and Jobs Act. This is interesting stuff.

[@ilovemyindia9555]

Very informative. Thanks for sharing it👍

[@ashoksharma9168]

Excellent presentation. Needs to stress that for Real Estate Professionals (active income), the losses are deductible against other (non-real estate) earned income. Also, need to file 1099-NEC forms for all vendors (and mail them a copy) paid over $600 per year to be able to deduct the costs on schedule E. It is of advantageous to breakdown (like in the miscellaneous section Schedule E at the bottom) some expenses like Trash, Pest Control, Lic instead of a large amount.

[@KK-itiswell]

Great content! Thanks

[@PoorBoy.22]

Very good and informative video. Thanks!

[@thestandberrys2519]

This was such a great breakdown :)

[@LYFEAccounting]

I appreciate that!

[@davidpiech8903]

Great summary!

[@cw9752]

Great information for me as a homeowner who is renting out property. Thanks.

[@LYFEAccounting]

Glad it was helpful!

[@robertbotta6536]

Awesome! Thank you.

[@riobori1602]

God bless you and your company. I watched some of your videos. The knowledge your shared enrich my life. I hope you become very successful beyond your wildest dreams. Not sure how you got 3 dislikes by the way.

[@LYFEAccounting]

Thanks Mario, comment like this mean the world to us! Thanks for sharing!

[@constancereed2796]

Thanks for information I had no knowledge of

[@hanwin651]

Thanks a lot !

[@jonathankerner2094]

Excellent video thank you so much! I am your new subscriber.

[@LYFEAccounting]

Thanks for the sub and welcome to the family!

[@ironlion7615]

Great vid

[@cali_cribs3259]

great info. thanks for sharing! LMAO on "the IRS is coming!"

[@felipesanin1808]

great vid

[@jasonyuan1283]

Can you make a video of steps to take if you buy a multifamily and your are working a w2 job, how to maximize your deductions as a passive investor?

[@kishoregunda]

Thanks for the video and information you shared....I bought a rental property last year and bought and installed ceiling fans and Washer/Dryer - is it some thing I can deduct including labor expenses? Also I heard we can deduct appliances depreciation for upto $5000 for just 1 year - can you elaborate on these?

[@JoeSmith-un4pl]

Love it

[@kesharirishabh]

Great video. Can I take these deductions when I use Property Management company to manage the property?

[@Steven-xg6ve]

8. Wages for employees and contractors. Can you write off home owners associations? They cut the grass, fix the roof, ets.. Love the vids keep the coming.

[@Airbnb-with-me]

Thank you

[@timtierney4218]

I have a quick question: Does the stepped-up-basis apply to inherited rental property? Asking about all rentals in general and residential rentals in particular.

[@livewithdr.andre1]

Just subscribed ✅

[@bruceLi2011]

Thanks

[@dandevos3816]

Awesome breakdown. I started renting out a property midway through 2020 that I did quite a few renovations to the year prior. I didn't take any deductions on the income I claimed b/c I assumed taking the standard deduction nullified that. Starting to think that was the wrong move. Can you go back and claim deductions from a previous return on next years taxes?

[@LYFEAccounting]

Thank you! So you can always do an amended return, but those do tend to get audited more

[@Crystal-jr7lp]

Good info. Thx

[@LYFEAccounting]

No problem! Which ones do you plan to use?

[@Crystal-jr7lp]

@@LYFEAccounting Need to speak to our accountant: home office, travel expenses, and other bills.

[@LYFEAccounting]

Make it happen!

[@tekc0der]

For heating and AC, if it's a repair (evap coils have leaks and needed to be replaced) and not a full AC system installation is that a deductible?

[@rachellachamawi6343]

If you buy property cash can you write off interest for the cash you paid (that was not taking from the bank)?

[@johnathanbruno2525]

Wondering why a new roof or hvac system wouldnt be considered a repair? Yes it may add value but its also necessary if they need to be replaced?

[@lucasainsworth1577]

Regarding the repair section ~8:20: if I am replacing the roof or AC out of necessity, yes it will increase the value most likely but it’s not exactly for the sake of improvement. How is that handled?

[@nn-xm8lz]

Can i use my same home office currently dedicated to my scorp for my rental llc?

[@shawnbrennan7526]

The 1031 deal is important, but nowhere as simple as you’ve made it sound. In my state at least, you need to ensure a third party handles all the money. Once you touch the proceeds from the first sale, you can’t use section 1031 to buy another rental property without paying the CG taxes. Plus, it doesn’t really wipe out the CGs. The basis just gets recalculated into the new property. Complicated, but very worthwhile if you can make everything work.

[@LYFEAccounting]

Thanks for sharing, maybe I should consider making a video breaking this down in more detail

[@abeporter4758]

Can a capital improvement be carried over to another property if you decide to sell the original property

[@justincase2830]

you can depreciate a rental property as soon as it is put into service; aka rented out.

[@ismtm]

Is the home office expense in your example of $5 per sq tf up-to 150sqft a per month expense? Because in many cases $750 barely the internet or telephone expense for the year.

[@jaytang6229]

how about the fees you paid for purchasing a house? such as Origination fee

[@MrMiyagae]

is there a limit for mortgage interest deduction? is the limit per property or per filing? and can i do the deductions if i don't have an LLC?

[@eamonhughes4046]

Hello, great episode! I was wondering if I can expense my personal time if I do the capital improvements on my home? If so are there standard rates to use to track this and what is a proper way to record my time in case of an audit?

[@LYFEAccounting]

We have some great videos on how to pay yourself, what type of business entity do you have?

[@eamonhughes4046]

@@LYFEAccounting I have a few rental properties and work for myself as a property manager and a handyman for repairs and improvements on the house. I was specifically curious on how to log/account for my labor cost when I make capital improvements to the rental properties that I own. I would like to depreciate these improvements but wasn't sure how to quantify the value of my time and what the IRS might need for a paper trail when looking at the capital improvements.

[@riosjc10]

@@eamonhughes4046 Did you ever figure this out?

[@eamonhughes4046]

@Jessica Rios unfortunately not really haha. I need to talk to a tax professional this year to discuss it

[@andrewrossnagel9433]

@@eamonhughes4046 Any update on this?

[@almaur703]

How about the home insurance?

[@johnhoffenbacher99]

Duplex or should I be looking out for

[@Waldo1982]

If an environmental surveyer is needed to develops a property, what can be deducted?

[@perzer3177]

If we are running multiple businesses and one is in a partnership with another person, how can I write off my home office since were using part of my home as the office for now but we're in a partnership? How does that work when its tax time?

[@dannaphys5008]

Question: Can I benefit from maximizing my income tax return on my rental property if my only income is from Social Security disability? I know it’s best to hire a CPA, I was playing around with online services such as Turbo Tax and I received no benefits. It was telling me I couldn’t benefit from deductions due to my SSDI passive income. I own 2 rental properties both in my name only. I paid cash for both properties. This is the 1st year I am filing a return owning the properties. I am at approximately negative $20,000 for 2021. Am I able to do a separate return for mY SSDI income only and a separate return for the rental properties as a sole proprietor.

[@howardtravis1081]

What’s help for real estate 🏡 investors. In the pandemic when the government said people didn’t pay rent could not be put out.

[@elMusico221]

If you owned the house for over a year but only rented it later in the second year, can you still write off the depreciation for the year in which you started renting it?

[@hiphopesq]

9:13 depreciation

[@rlsiler8663]

How is billing done? Is it important for that to get billed in my name?

[@songgy8228]

Can one claim depreciation regardless of the age of the building?

[@jencampbell5699]

With real estate losses capped once your annual AGI exceeds $150k and recaptured taxes to considered when a property is sold, how can a non-real estate professional, who loves their W2 job and has held their properties longer than five years, build wealth with real estate?

[@news2383]

If i hire a contractor to do repairs dues that go into the repairs box or the wages box?

[@elpiroo1990]

Question: If I got a new roof after a storm and went through an insurance claim, can I then deduct the deductible as a write-off? Under IRS 527 Publication would this be considered a casualty "This is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. Such events include a storm, fire, or earthquake." ?

[@cardayfree7560]

If you write off or deduct to a loss how do you qualify for financing to grow your business.

[@Matteo-xm6xo]

So if I have a 300sq ft home office deduction.1500$ can I take that off of my earned income?

[@isd605]

Great content! Your Website states that you are not accepting new clients. Is this true?

[@LYFEAccounting]

Hey Greg, yes that is true. Announcement coming soon though.

[@mariachampion484]

What about using all my garage and living room as storage for all my rental supplies? Can I deduct garage and living room?

[@mtigress4589]

No. It's highly unlikely there is no personal use there. An auditor would disallow that quickly.

[@edwinhunnet2666]

Hey guys, so everything he listed at the end of “write off#3” is considered as write offs?

[@zerro2u69]

I would like you to look into my taxes. How do I get into contact with your business?

[@SimmCity3]

In regards to the 1031 exchange. Is it 6 months because one been told its 45 days. Can you provide me a link to where the IRS shows the specific time frame please?

[@LYFEAccounting]

Once a sale is made, the taxpayer has 45 days to identify new property and 180 days to execute the transaction, through an intermediary.

[@perzer3177]

Also, can we write off our home office for each business we have if we run multiple businesses?

[@LYFEAccounting]

You can only write off an expense once. So you can split the home office expenses amongst the businesses but not the same expense over and over again

[@etschool]

Property taxes and mortgage interest deduction is only when itemized deduction is higher than the standard deduction, right?

[@LYFEAccounting]

Not for a rental property, its filed on a separate tax form called Schedule E. You are referring to the Schedule C

[@MaiNguyen-pf1xy]

If you sell your rental property after you buy another rental property at higher price approximately 4mos. Can you still save on tax capital gain? Or you have to sell before buy within 6mos? Thanks

[@keithfreitas2983]

Have to sell then buy, because you using any gain to buy new property that is equal or higher.

[@shawnbrennan7526]

On #5, there is no “may”. The IRS will absolutely require you to pay the 25% depreciation recapture. Or am I missing something?

[@frasercpainc2958]

There is no recapture if you have a loss on sale.

[@noratorres-rosas3342]

In the video, it seems like the entire capital gain would be taxed at 25%. To clarify, it is only the depreciation that is recaptured that is taxed at "up to" 25% as long as there is a gain. Example: Rental purchase of $100K, depreciation taken $22K, sale of $150K; Gain is then $72K (adjusted basis = $78K ($100K - $22K), and total gain = $150K-78K = $72K). Of the $72K in gain, $22K is depreciation recapture and taxed up to 25% (tax rate is lower if the taxpayer's tax bracket is lower). The remaining $50K of gain ($72-22)K gets taxed at long-term capital gains tax rate (owned more than a year). If the home had sold at say $90K instead, then the Gain would have been $12K ($90K sale - 78K adj. basis), in which case the taxpayer would then pay have recaptured depreciation on the entire $12K gain (taxed at up to 25% tax rate, but no more than his tax bracket).

[@shawnbrennan7526]

@@noratorres-rosas3342 The first half of your comment is well stated. The second half where it is sold at $90k, I thought you’d still owe recapture on the $22k, and then you’d take a CG loss of $10k. I’m not positive, but I thought that was how the tax forms were calculating it.

[@thinkinvesting8022]

everyone who lives on less then they make needs to learn how to invest for their future.

[@LYFEAccounting]

Couldn’t agreee more

[@alvinsingh9750]

What if i kick someone out and fix my property $30,000 like new roof. Can i write it offf?

[@RobinhoodCoins]

When you use the home office deduction, does that deduction impact your taxes when you sell the home years later?

[@LYFEAccounting]

No, two separate things

[@RobinhoodCoins]

@@LYFEAccounting thank you!

[@k.suliman1010]

If you pay more tax then you will be qualify for more finance more money to work with exception to the depression

[@carlosrios8920]

You didnt mention HOA fees or Master HOA fees. Are those tax write-offs?

[@omolayo_ojo]

I have a rental property. My tenant is on section 8, so the govt pays her rent every month. How can I write off my property tax?

[@keithfreitas2983]

Doesn't matter how rent is paid, all writeoffs for that property can be taken. I suggest you get a tax Accountant to do your taxes as things change yearly. Was worth it for me with 5 properties.

[@boystobusiness]

I am an Airbnb host one house I own and two rentals I rent. Am I active professional?

[@LYFEAccounting]

Do you pass the two part test? 1. Half of your time is spent in real estate activities where you materially participate, and (2) spent more than 750 hours in real estate activities where you materially participate?

[@boystobusiness]

@@LYFEAccounting yes I would say so, I spend a little over 2 hours a on the business. Does communicating with guest such as checking them in, resolving issues over the phone count?

[@mtigress4589]

Airbnbs tend not to count as rental properties and should be reported on schedule c.

[@peachpink4900]

Hello So if we sell and then buy one we won’t pay tax

[@LYFEAccounting]

Not automatically. You would have to perform a 1031 exchange.

[@peachpink4900]

@@LYFEAccounting Thank you Even if it is investment property we still can file 1031

[@gama1123]

Really? No mention of travel expenses to and from the property?

[@lupitamacedo193]

👍🙏

[@investwithsarah]

This seems to be content from 2021.

[@m0ntr0s0]

I have a question that i look all over the internet and i cant find the answer. I hope some one here have the answer . The depreciation is calculated from the money ypu have left after expenses like mortgage and water bill . Example I charge rent 1k per month x 12 is 12,000 a year ypu use this amout or you use the amount left after expenses like i charge 1k per month but i pay 50 for water and 600 fpr mortgage i have left 350 per month x 12 is 4,200 per year. Which one you use yo calculate depreciation please some answer ???????

[@timtierney4218]

I am not an accountant, but this is how I handle depreciation on my taxes. Depreciation is calculated based solely on the purchase price of the property. The fully depreciated life span is 27.5 years. To calculate the depreciation you divide the purchase price of the property by 330 (27.5 years represented in months). Using that per-month figure calculate your first year depreciation as: (number of months owned in the first year - 1 * the monthly depreciation value) and carry the result to Schedule E. For every fully owned year thereafter simply use : ( the monthly depreciation value * 12) as the value to go on the Schedule E. When you sell the property it is similar to the first year of ownership with the calculation being (number of months owned in the first year + 1 * the monthly depreciation value) with this being the Schedule E value.

[@sosimple7594]

Do you do taxes for the public? Are you a CPA?

[@LYFEAccounting]

Hey! We are currently not accepting new clients at the moment.

[@1SOUL4JAH]

🔥💌✊🏽

[@LYFEAccounting]

💯💯💯

[@far06c]

1:30 long intro is too long bro, just get to the point please.. .time is money

[@orangeblock3792]

Intro is too damn long.. start at 2:25

[@mariamonicavega8890]

Go Brandon

[@FF-xl7yw]

YOUR VIDEO i good till you do the "Hey Shawn Look". That is non-serious and distracts the viewer. stay focused and serious. there is no space for jokes here. this is serious stuff.

[@peachpink4900]

Thank you

[@LYFEAccounting]

You're welcome!

[@perzer3177]

If we are running multiple businesses and one is in a partnership with another person, how can I write off my home office since were using part of my home as the office for now but we're in a partnership? How does that work when its tax time?

[@dannaphys5008]

Question: Can I benefit from maximizing my income tax return on my rental property if my only income is from Social Security disability? I know it’s best to hire a CPA, I was playing around with online services such as Turbo Tax and I received no benefits. It was telling me I couldn’t benefit from deductions due to my SSDI passive income. I own 2 rental properties both in my name only. I paid cash for both properties. This is the 1st year I am filing a return owning the properties. I am at approximately negative $20,000 for 2021. Am I able to do a separate return for mY SSDI income only and a separate return for the rental properties as a sole proprietor.

[@perzer3177]

If we are running multiple businesses and one is in a partnership with another person, how can I write off my home office since were using part of my home as the office for now but we're in a partnership? How does that work when its tax time?

[@noratorres-rosas3342]

Research UPE - Unreimbursed Partnership Expenses, and I highly advise to seek a tax professional with experience in businesses 🙂