18 Jan Deductions for property taxes paid
Photo: DuBoix/morguefile.comQ. I own many properties in various LLCs. Many are purchased, renovated and promptly sold without any rental collection. Will real estate taxes paid not be deductible merely because rent is not collected?
— Flipper
A. It sounds like you would be considered a producer of property for tax purposes based on your business activities.
If that’s the case, any real estate taxes paid during the construction or renovation period would be capitalized into the cost basis of the property and become deductible against the sales proceeds of the home, said Len Nitti, a certified public accountant with Wilkin & Guttenplan in East Brunswick.
If it were a rental property, Nitti said, the taxes would be deductible on Schedule E once it becomes a rental activity.
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This post was first published in January 2018.
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