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Tax Considerations of Rental Properties: Maximizing Depreciation, 199A Eligibility, Elections, and Schedule E

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Tuesday, June 18, 2024

Recorded event now available

or call 1-800-926-7926

This webinar will explain how to maximize current deductions for rental property owners. Our panel of property experts will review depreciation rules, trade or business requirements, overlooked expense deductions, and completing Schedule E for tax practitioners and rental property owners.

Description

Rental properties are one of the most frequently seen items on taxpayer's returns. They are also one of the most complex. There are many tax issues to consider for taxpayers owning even one rental property. Tax practitioners have new trade or business considerations since the addition of the 20 percent QBI deduction. The IRS issued Revenue Procedure 2019-38 that provides a safe harbor for qualifying for the 199A deduction. The requirements include performing a minimum of 250 hours of rental services and providing a statement with the taxpayer's return.

The character of expenditures and whether they are a betterment, restoration, or adaptation versus deductible repairs significantly affect the current year's taxable income. Some of these costs are currently deductible under de minimis or routine maintenance rules or by making the small business safe harbor election.

There are different depreciation rules for rental properties. Residential rental properties generally do not qualify for Section 179 deductions but can be eligible for bonus depreciation. Tax practitioners need to understand how to maximize expense deductions for roofs, carpets and flooring, qualifying land improvements including fencing and parking lots, and other routine purchases made for rental properties.

Listen as our panel of federal income tax veterans discusses tax-saving elections, the QBI deduction, and passive loss deductions for rental properties.

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Outline

  1. Rental properties: introduction
  2. Passive losses
  3. Trade or business determination
    1. Defining trade or business
    2. Grouping rules
  4. 199A deduction, Revenue Procedure 2019-38 Safe Harbor
  5. Depreciation
  6. Deductible expenses
  7. Elections
  8. Filing Schedule E

Benefits

The panel will review these and other critical issues:

  • When are rental properties considered a trade or business?
  • Depreciation methods, lives, and deductions for rental property purchases
  • Deductible expenses for rental properties that are often overlooked
  • Elections that benefit most rental properties
  • Passive loss limitations and how these affect rental property income and sales

Faculty

Castelli, Thomas
Thomas Castelli, CFP, CPA
Partner
Hall CPA

Mr. Castelli's areas of focus are tax planning

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Access Anytime, Anywhere

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