Important News for Rental Property Owners

February 19, 2015

Do you own rental property? Do you have repairs, maintenance, supplies, building or leasehold improvements for your rental property (residential or commercial) and/or your business? Do these expenses exceed $500.00? (Don’t forget those individuals owning the property but renting/leasing it to their corporation. This applies to you, too).

Within the Affordable Care Act (ACA) is (are?) hiding new Revenue Procedures that may require you to file a Form 3115 or an annual “election” or both for 2014. If required, this must be completed BEFORE your tax return can be finalized. This new regulation addresses the issue as to whether or not you can deduct or depreciate certain expenses-it is a change in “treatment” of these expenses. This is the largest change to affect “small taxpayers” in almost 30 years.

According to IRS instructions it takes 20 hours to learn about the law, 39 hours for recordkeeping and 24 hours to prepare Form 3115. So…if you should decide to go at it on your own, you can search the Tangible Property Regulations on the IRS site, but my fear is that most people are just not aware of it. It appears that the most popular tax preparation software just recently added it to its questionnaire but there’s still a lot of confusion around it. The smart thing to do is to use an Enrolled Agent to prepare your taxes – such as yours truly – especially this year!

If you know of any tax “do-it-yourselfers”, please pass this link along to them – they may not even be aware of the new regulations!

Several accounting and tax organizations are working hard to get IRS to reduce and/or change this new burden. Some relief has been granted. Do you know what that is or if you qualify?

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