Rental Deductions for SFR Sold - Posted by Alejandro O

Posted by Dave T on June 14, 2006 at 22:08:53:

You can take mortgage interest and property tax deductions on Schedule A, if you itemize your deductions.

All the other costs you mentioned are personal expenses and are not deductible.

Depreciation is not allowed on your primary residence. Schedule E does not apply in your situation.

Rental Deductions for SFR Sold - Posted by Alejandro O

Posted by Alejandro O on June 14, 2006 at 18:59:48:

Just a question to anyone out there with a reasonable knowlege of what is legit and what is not when it comes to IRS taxes. Please don’t reply with the obvious answer - talk to your accountant. If there are any CPA’s out there that have a good answer to my question I would appreciate it.

In January, I moved out of my primary residence, and listed the home for sale. It finally sold in May. Can I claim the related expenses (utilities), interest paid, depreciation, etc. incurred on the home on schedule E of my return? The property was never used as a rental during its listing period. What evidence would have to be provided to say it was an unoccupied rental. I guess one could argue that nobody wanted to rent a house that was for sale. Or, do I just have to claim the “claimable” i.e. interest and depreciation on my personal deductions, along with those of my new primary residence?

I will be going over all of this with my accountant in a couple of weeks, but this question is burning in my head and for my own sanity, I’d like to know soon. Thank you everyone for your input.


Re: Rental Deductions for SFR Sold - Posted by Frank Chin

Posted by Frank Chin on June 16, 2006 at 04:58:04:


You’re selling your “personal” residence, so nothing goes on the “schedule E”, as it’s not business. BUT, you’re still entitled to deduct “personal” mortgage interest, personal RE taxes.

Presumably, you’re walking away “tax free” unless your capital gains exceed $500,000 for a couple, $250,000 for single, counting utilities, maintenance as a selling expense would have no effect on your taxes due, as these items would normally be a selling expense.

Frank Chin