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When Renting Out a House Can You Write Off Condo Association Fees?

by Fraser Sherman

The tax write-offs on rental property are more generous than on your personal home. You can deduct almost all of your expenses, including maintenance, repairs, landscaping and property taxes. Condominium and homeowner association dues and assessments are deductible, too. Depending on your rental income and your circumstances, you may not be able to claim all of your expenses this year.

Business or Pleasure

If you own a condo and use it strictly as an investment -- it's always available for rent -- you can write off 100 percent of your fees and other expenses. Use it for personal time and your deduction shrinks. If you vacation there for four weeks out of the year, for example, you can only write off 92 percent of expenses, because about 8 percent of the year was for personal use. Allowing family or friends to stay there for free or below your usual rates also counts as personal time.

Numbers of Days

If you stay in the condo more than 14 days a year, or 10 percent of the rental period -- whichever is more -- and you rent it out on fewer than 15 days, you don't report rental income or expenses. If you have to report rental income, you need to track rental occupancy, personal use and the days it was available but vacant. Say you lived in it for four months, rented it out for four months, and then had it available for rent but it remained empty for the final four months of the year; it was occupied for eight months, half for rental, so you can deduct 50 percent of the expenses.

Passive Activity

The IRS counts rent checks as "passive income," which limits your deduction. You can't write off passive losses against other types of income; if your condo is in the red, you carry the loss over into the following year and deduct it then. You get an exception if you're active in managing your rental, for example, you advertise vacancies or screen tenants. Active management lets you write off up to $25,000 in losses against other income.

Filing the Return

You report rental income and expenses on the IRS' Schedule E tax form. If you have multiple rental properties, you can deduct losses on one of them against the income of the others. If you have passive losses to carry forward, you fill out Form 8582 to report them. Report any taxable income or deductible losses for the current year on Form 1040. Add them in with all your other income and proceed to figure your total tax.

About the Author

Author of two film reference books, "Cyborgs, Santa Claus and Satan" and "The Wizard of Oz Catalog." Published in Air & Space, Backpacker, Newsweek, The Writer, and multiple trade journals (can fax samples if requested, don't have them available digitally)

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