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Old 02-04-2012, 02:52 PM
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Rental Property or hard lesson learned?

I got divorced in 2011. I owned a home in Tennessee which my ex continued to live in on a month to month basis rental. We did not have a rental agreement other than what was stated in our divorce agreement. I moved to Ohio and have been renting a residence of my own. She was not on the loan for this property. She moved out in July 2011 leaving a giant mess and several thousand dollars worth of cleanup and repair costs. I have been unable to sell or rent this property since she moved out in July. Am I able to claim this property as a rental as well as the loss of funds ($800 a month for the mortgage since July and the clean up costs, as well as cost of travel?) I have had to travel to Tennesee 4 times due to this property since then. I have not lived there in over 2 years and have had my own residence in Ohio. I hope this makes sense. Please be kind as I'm not well versed in such matters.


Last edited by confusedinohio : 02-04-2012 at 02:54 PM.


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Old 02-04-2012, 05:57 PM
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“ Am I able to claim this property as a rental as well as the loss of funds ($800 a month for the mortgage since July and the clean up costs, as well as cost of travel?) I have had to travel to Tennesee 4 times due to this property since then.”---->So, you didn’t have a rental agreement other than what was stated in your divorce agreement; leases and rental agreements should always be in writing, even though most states(you need to check it with your state) enforce oral/spoken agreements for a certain period. While oral agreements may seem easy and informal, they often lead to disputes.You can deduct your rental property expenses,i.e., traveling expenses to visit the property, or clean costs, repairs, r/e taxes or etc. You'll report any income and expenses from your rental property on Schedule E. You'll also file a Form 4562 so that you can claim a depreciation deduction on your rental property. However, you need to recapture unrecaptured deprec( it is tax on capital gains due to accumulated depreciation)that is subject to 25% when you dispose of your rental property.As long as you sell your rental pty at aloss, no depr recap. When your rental pty is subsequently sold, the gain (if there is gain generated, recognized, I mean)on the sale will be higher since it's basis is now lower. How the gain is treated depends on the type of asset.Depreciation recapture can cause a significant tax impact for people who are selling residential rental properties. Part of the gain will be taxed as a capital gain and may qualify for the maximum 15% rate on long-term gains. The part of the gain that is related to depreciation, however, will be taxed at a maximum 25% rate.
Even when a rental property is vacant, a landlord remains able to claim deductions despite the loss of rental income.
“ I have not lived there in over 2 years and have had my own residence in Ohio.”--->As described above.



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