Tax Deductions for Rental Properties and HOA Fees

Posted by KDAOJan 31, 20160 Comments

If you own rental property, whether a vacation home that you rent out when you are not using it or a primary residence that you offer as a rental year-round, you are sitting on a wealth of tax deductions. Often landlords do not take all of the tax deductions available to them, simply because they are not aware of them all. Here are some facts about rental properties and the tax deductions they bring.

Hired Help
If you have people who help you with the property, such as residential managers on a multi-unit property or maintenance workers, their salaries and other employment-related expenses are deductible. The same is true for contractors that help with occasional repairs. The labor costs and fees for builders, electricians, handymen and plumbers who help with your property are deductible.

Utilities and Repairs
The IRS allows you to deduct most “reasonable and necessary” items you have to pay to keep the property running and livable. Do you pay the utilities on your properties? If so, you can deduct those expenses. Similarly, if you are performing repairs on the property, even if you do them yourself, you can deduct the cost of the materials.

Travel Costs
If you spend a lot of time traveling to your rental properties, you may be able to deduct some of your travel costs. Always track your mileage, which is 100 percent deductible at the current mileage rate. Portions of your meal and entertainment expenses can be deductible as well.

HOA Fees May Be Deductible
If you pay HOA fees for your property, you may be able to deduct them, but only for the months out of the year that you are renting the property. In other words, if you have a vacation home and rent it out nine months out of the year, using it for personal use the remaining months, then you can only deduct the HOA fees for those nine months.

As you can see, investment property is full of potential tax deductions. If you have further questions about how you can maximize the deductions on your rental property, contact the real estate lawyers at KDAO for legal advice.

Klein, Daday, Aretos, & O'Donoghue, LLC does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice.