{"id":10,"date":"2015-01-30T17:03:40","date_gmt":"2015-01-30T17:03:40","guid":{"rendered":"http:\/\/cpamorey.com\/blog\/?p=10"},"modified":"2015-01-30T17:03:40","modified_gmt":"2015-01-30T17:03:40","slug":"common-mistakes-on-orange-county-rental-properties","status":"publish","type":"post","link":"https:\/\/cpamorey.com\/blog\/common-mistakes-on-orange-county-rental-properties\/","title":{"rendered":"Common Mistakes on Orange County Rental Properties"},"content":{"rendered":"

Owning rental properties is a common way to increase your net worth in the long run as well as \"Rental<\/a>generate some passive income in the short run. If you are new to the landlord business though, you may fall prey to some common rental property income mistakes when you file your tax return. Of course, the best way to ensure that you don\u2019t make any of the following mistakes is to have a professional prepare, or at least review, your tax return before filing it.
\n1. Not declaring rent when it is received<\/strong> \u2013 any rent received by a landlord must be declared in the year it is received. It is common, for example, to require a deposit as well as first and last month\u2019s rent when leasing a property. Even though the last month\u2019s rent isn\u2019t actually due yet it must be declared in the year when you receive the funds.
\n2. Security deposits count as income if not returned<\/strong> \u2013 if you collected a $2,000 security deposit and find that you need to keep $1,000 of it when the tenant moves out to repair damages and\/or clean the property you need to declare the $1,000 as income. Of course, you may also have corresponding expenses if the funds are used to complete repairs.
\n3. Expenses paid by a tenant are income to the landlord<\/strong> — if your tenant fixes something on the property, the money spent by the tenant is actually income to the landlord if the cost of the repairs is deducted off the rent. Again, you may also have a corresponding deduction for the cost of the repairs, meaning you need to declare both income and expenses.
\n4. Property and furnishings are depreciated differently<\/strong> \u2013 property is often rented \u201cfurnished\u201d. You may deduct the cost of the furnishings but make sure you calculate the deduction properly. Residential rental property is depreciated over 27 \u00bd years while furniture is depreciated over just five years.
\n5. Failing to document<\/strong> \u2013 if it isn\u2019t in writing is doesn\u2019t count! Everything from your original lease agreement to the cost of replacing a lost key should be documented in writing. Not only does this ensure that you will get credit for all your allowable deductions but is also protects you in the event of an audit by the Internal Revenue Service.
\nBy avoiding these five common rental income tax mistakes you can dramatically reduce your risk of an audit.
\nMorey and Associates, Inc. is a Certified Public Accounting Firm<\/a> focusing on accounting and tax for Orange County residents. We have clients investing in rental properties, investment groups, and vacation properties too. Simply call Jerry Morey<\/strong> at 949-485-2011<\/strong> to discuss your situation.<\/p>\n","protected":false},"excerpt":{"rendered":"

Owning rental properties is a common way to increase your net worth in the long run as well as generate some passive income in the short run. If you are new to the landlord business though, you may fall prey to some common rental property income mistakes when you file your tax return. Of course, […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[],"tags":[],"_links":{"self":[{"href":"https:\/\/cpamorey.com\/blog\/wp-json\/wp\/v2\/posts\/10"}],"collection":[{"href":"https:\/\/cpamorey.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cpamorey.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cpamorey.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/cpamorey.com\/blog\/wp-json\/wp\/v2\/comments?post=10"}],"version-history":[{"count":1,"href":"https:\/\/cpamorey.com\/blog\/wp-json\/wp\/v2\/posts\/10\/revisions"}],"predecessor-version":[{"id":12,"href":"https:\/\/cpamorey.com\/blog\/wp-json\/wp\/v2\/posts\/10\/revisions\/12"}],"wp:attachment":[{"href":"https:\/\/cpamorey.com\/blog\/wp-json\/wp\/v2\/media?parent=10"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cpamorey.com\/blog\/wp-json\/wp\/v2\/categories?post=10"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cpamorey.com\/blog\/wp-json\/wp\/v2\/tags?post=10"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}