Tax, Accounting and Business Consulting

Seven Days and Thirty Days Rental Rules  Seven days rental rule allows real estate owners to claim the loss from the rental activates to offset the loss against other earned income. In simply put, If a property is rented for an average of 7 days or less then owners will be eligible for tax-deductible losses.  For example if the property was rented for 132 days during the year and it was rented for 22 times. The average rental period will be 6 days. You are eligible to deduct the rental loss from your income. (Treas. Reg. Sec. 1.469-1T(e)(3)(ii)(A)). Likewise if it is rented for average period of 30 days or less and services are provided to the renters, rental income is active income. The rule says if it is rented for 7 days or less and in case of 30 days or less with substantial service, the activity is not a rental activity.  It is worthwhile take note that it is a favorable provision of tax law for owner of vacation rentals. Generally the owner does not participat...

  Residential Real Estate Tax Planning Real estate investment is a very good investment and produce regular stream of income if managed properly as well creates equity for the future. If it is planned properly real estate investment can save a big deal of taxes if planned properly. Other investment has very little options when it comes to saving taxes, but real estate provides great deal of opportunities. In most cases real estate rentals are passive income. However, there are certain tricks and tools that can help you save taxes not only for current year but also for future years.  How is rental income taxed   Rental income is a passive income in most cases, and it is taxes at the ordinary income tax rate. If there is loss, the loss can only be off set against passive income. If there is no passive income or passive income is not enough to offset rental income, the loss will be carried forward to future years until you have passive income. The passive income need...