 |
New Investor |
| |
 |
Edith. Good evening. I have several investment properties that I have started acquiring this year. My question has to do with how I report expenses vs. capital investments. Property x was a "fixer upper" that we bought with 10% down. We spend about $7,000 in materials, labor, and travel-related expenses to get it to "rental" condition. This all occured BEFORE we had a tenant in it. The expenses include all the pre-purchase stuff (inspector, articles of incorporation, down payment, etc...), as well as lot's of cleaning supplies, new floors, refrigerator, lighting, paint, etc...
How do we account for these costs?
1: Are they considered capital costs that we add to our cost basis (and depreciate over time)?
2: Are they expnses in the operation of our property (which is under an LLC) that we account for as expenses for this year?
3: Or...do we account for some items as expenses and some items as capital costs (added to cost basis of the property)?
Please help!!!!
|
| |
| |
 |
It is absolutely essential that you hire your own CPA immediately. Every investor should have one even before making a first purchase. You need advice about bookkeeping, about structuring things to best tax advantage and lots more. And your own CPA is the person to answer your questions.
Good luck to you.
|
| |
|
Edith
Originally published on October 22, 2007 |
| |
| |
|
Back to Summary
|
< Previous | Next > |
| |
|
|
