www.irs.gov/formspubs is a great website to send to your clients to order tax forms and publications. Some specific forms that may be useful are: 523 Selling Your Home, 527 Residential Rental Property, 547 Casualties, Disasters, and Thefts, 551 Basis of Assets, 555 Community Property, 587 Business Use of Your Home, and 936 Home Mortgage Interest Deduction.
With Form 551 Basis of Assets, I remind buyers when they purchase a home to bifurcate the cost of the property right in their contract to purchase. That way, there is a "basis" of record. Here is a recent cut and paste from the special provisions section of one of my client's investment property contract:
Buyer requests $140,000 cost to be broken down into the following: $9,000 personal property, $2,750 land improvements, $115,000 for building, and $13,250 land.
A standard accountant will usually just enter $140,000 into their software and let the program bifurcate the cost into 80% building and 20% land. However, this is a disservice to their clients taxwise. Tom Lundstedt, in his residential and investment real estate classes, teaches if this is what your accountant does, fire him and get a new accountant.
Form 8396 Mortgage Interest Credit should prove helpful to your clients as well.
Disclaimer: A professional tax consultant should be retained for proper tax advice. This blog is for entertainment purposes only and should not be considered tax advice.
A few other AR tax blogs:
Geena's third in a series of 8 http://activerain.com/blogsview/38587/TAX-TIPS
John's http://activerain.com/blogsview/23576/Don-t-Forget-Your
Vickie's http://activerain.com/blogsview/38314/Tax-Deductions-for-PMI and http://activerain.com/blogsview/38601/Homeowner-Tax-Perks
For many more on taxes click here.
Thanks!
Rob Lang, ABR, ePro, GRI Realtor®
Realty Executives, Hedges Real Estate
300 Rockfence Pl, Lawrence, KS 66049
785-393-2274 (cell) 785-542-1661 (fax)
rob@LetRobDoIt.com (same website name if you want to visit)
NOTE: This blog was written in the past about properties on the market at the time of the blog being written and should not be considered as active listings beyond the date of this blog.
Rob,
How do you e-mail this to someone? Do you have to cut-and-paste it or is there an e-mail feature?
Lucky :)
Right alongside where you can rank my blog a 5, Hint, Hint, (shameless plug) is an email icon. Just click it.
Rob