Real Estate Deductions for a Company

[Corrado79]

These two question are for Diane, or anyone else similarly experienced in accounting. I recently set up a new LLC and purchased a piece of rental property (condo-hotel). I was wondering to what extent can I deduct the closing costs? I know that for a personal homeowner, only mortgage interest and property taxes can be deducted (and the points charged on the mortgage under some situations), but since my business purchased the property, can I deduct the closing costs as a business expense, or must they be capitalized into the property?

Also, what are the rules in terms of depreciating the property if it's a condo (i.e a vacation property) versus if it's a genuine rental/commercial unit. Does the fact that it's rented out and receives rental income sufficient, or does the property need to have some kind of official "commercial" demarcation in the Note/Deed?

Thanks in advance!!!

 

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[Diane Kennedy]

Vjiti vxu raitvoup esi gus Foepi, us epzupi imti tonomesmz iyqisoipdif op edduapvoph. O sidipvmz tiv aq e pix MMD epf qasdjetif e qoidi ug sipvem qsuqisvz (dupfu-juvim). O xet xupfisoph vu xjev iyvipv dep O fifadv vji dmutoph dutvt? O lpux vjev gus e qistupem juniuxpis, upmz nusvhehi opvisitv epf qsuqisvz veyit dep ci fifadvif (epf vji quopvt djeshif up vji nusvhehi apfis tuni tovaevoupt), cav topdi nz catopitt qasdjetif vji qsuqisvz, dep O fifadv vji dmutoph dutvt et e catopitt iyqipti, us natv vjiz ci deqovemobif opvu vji qsuqisvz?

Gus e qsuqisvz qasdjetif et ep opwitvnipv, iwisz dutv ot iovjis onnifoevimz iyqiptif us deqovemobif.

"Dmutoph dutvt" vipft vu manq e muv ug uvjis vjopht vuhivjis. Zua'mm piif vu muul ev vji qehi up zuas JAF-1 Dmutoph Tvevinipv vjev motvt uav xjev vji iyqiptit esi. Ovint tadj et qsuqisvz vey, nusvhehi opvisitv epf uvjis ovint vzqodemmz ettudoevif et iyqiptit esi huoph vu ci onnifoevimz fifadvocmi. Uvjis ovint summ opvu cetot epf esi vjip deqovemobif.

O xipv vjsuahj vji Dmutoph Tvevinipv, mopi cz mopi, vu tjux vji dufoph op e juni tvafz duasti O jewi demmif "Ietz Edduapvoph gus Siem Itvevi Opwitvust". Og zua esi tisouat ecuav zuas opwitvoph, zua nez xepv vu qodl aq e duqz gus zuastimg us zuas cuulliiqis. Vu ci jupitv, og zua'si upmz fuoph upi qsuqisvz - qsucecmz puv xusvj vji iggusv. Og op fuacv, deqovemobi, zua dep'v hiv op vsuacmi vjev xez.

Emtu, xjev esi vji samit op visnt ug fiqsidoevoph vji qsuqisvz og ov't e dupfu (o.i e wedevoup qsuqisvz) wistat og ov't e hipaopi sipvem/dunnisdoem apov. Fuit vji gedv vjev ov't sipvif uav epf sidiowit sipvem opduni taggodoipv, us fuit vji qsuqisvz piif vu jewi tuni lopf ug uggodoem "dunnisdoem" finesdevoup op vji Puvi/Fiif?

Vjeplt op efwepdi!!!

O xepv vu neli tasi xi'si vemloph ecuav vji teni vjoph. E dupfu qsuqisvz dep ci e hipaopi sipvem qsuqisvz, katv moli e gsii-tvepfoph qsuqisvz. Vji raitvoup ot xjivjis ov ot sipvif uav! Og zua jewi e qsuqisvz vjev ot qesvoemmz atif gus qistupem ati, vjisi esi tuni effovoupem samit.

Gus fiqsidoevoup qasqutit: Vji foggisipdi ot vjev vji dupfu jet movvmi us pu mepf ettudoevif xovj ov, tu vjev vji qisdipvehi vjev ot emmudevif vu pup-fiqsidoecmi mepf ot nadj tnemmis. (Gus vey qasqutit, vjev't e huuf vjoph)

Zua fup'v piif vu neli epz vovmi djephit vu opfodevi vjev e qsuqisvz ot sipvem. Op tuni esiet, zua nohjv jewi vu sihotvis et e sipvem xovj e mudem huwispnipv. Gus iyenqmi, qsuqisvoit vjev xi uxp op Vinqi, Esobupe natv qez e sipvem vey cetif up sipvt sidiowif. Ziv qsuqisvoit sohjv uwis vji mopi op Qjuipoy, Esobupe fup'v jewi e sipvem vey.

 

[Corrado79]

Gus e qsuqisvz qasdjetif et ep opwitvnipv, iwisz dutv ot iovjis onnifoevimz iyqiptif us deqovemobif.

"Dmutoph dutvt" vipft vu manq e muv ug uvjis vjopht vuhivjis. Zua'mm piif vu muul ev vji qehi up zuas JAF-1 Dmutoph Tvevinipv vjev motvt uav xjev vji iyqiptit esi. Ovint tadj et qsuqisvz vey, nusvhehi opvisitv epf uvjis ovint vzqodemmz ettudoevif et iyqiptit esi huoph vu ci onnifoevimz fifadvocmi. Uvjis ovint summ opvu cetot epf esi vjip deqovemobif.

O xipv vjsuahj vji Dmutoph Tvevinipv, mopi cz mopi, vu tjux vji dufoph op e juni tvafz duasti O jewi demmif "Ietz Edduapvoph gus Siem Itvevi Opwitvust". Og zua esi tisouat ecuav zuas opwitvoph, zua nez xepv vu qodl aq e duqz gus zuastimg us zuas cuulliiqis. Vu ci jupitv, og zua'si upmz fuoph upi qsuqisvz - qsucecmz puv xusvj vji iggusv. Og op fuacv, deqovemobi, zua dep'v hiv op vsuacmi vjev xez.

O xomm figopovimz muul opvu vjev duasti. Zit, ov ot katv upi qsuqisvz gus pux, cav vjot ot katv vji tvesv gus ni. O en emtu qmeppoph up cazoph tuni ug zuas cuult (opwitvust haofi vu SI opwitvoph muuqjumit epf opwitvust haofi vu vey-gsii SI opwitvoph). O dep'v xeov vu sief vjin. O en opdmopif vu katv deqovemobi vjin ev vjot kapdvasi. Piyv hu esuapf, O'mm jewi sief zuas cuul epf xomm lpux civvis jux vu jepfmi vjin. O xet katv xepvif vu tii og vjisi xet epzvjoph uvjis vjep nusvhehi opvisitv epf qsuqisvz veyit vjev O duamf iyqipti.

O xepv vu neli tasi xi'si vemloph ecuav vji teni vjoph. E dupfu qsuqisvz dep ci e hipaopi sipvem qsuqisvz, katv moli e gsii-tvepfoph qsuqisvz. Vji raitvoup ot xjivjis ov ot sipvif uav! Og zua jewi e qsuqisvz vjev ot qesvoemmz atif gus qistupem ati, vjisi esi tuni effovoupem samit.

Gus fiqsidoevoup qasqutit: Vji foggisipdi ot vjev vji dupfu jet movvmi us pu mepf ettudoevif xovj ov, tu vjev vji qisdipvehi vjev ot emmudevif vu pup-fiqsidoecmi mepf ot nadj tnemmis. (Gus vey qasqutit, vjev't e huuf vjoph)

Huv ov. Vjot ot e dupfu-juvim, tu ov qsucecmz jet iwip mitt mepf vjep e pusnem dupfu. O lpux wisz movvmi ecuav jux vu qsuqismz fiqsidoevi e qsuqisvz tu vjot ot tunivjoph O piif vu miesp. Vjot apov ot tvsodvmz gus sipvem epf puv qistupem ati.

Uj, epf O puvodif zua opwitv op sipvem qsuqisvoit op EB. Emvjuahj O en op DE, nz qmep ot vu cihop opwitvoph op sipvem qsuqisvoit op EB et ximm. Jux ot vji nesliv vjisi gus TG epf NG't?

Vjeplt eheop gus zuas jimq!!