I don't know about you, however I love to get out and explore my city and the surrounding areas.I especially like inexpensive or free things to do on a hot summer day/night. In this list you
Tax Deductions For Home Flippers
So What can You Slam-Dunk Deduct?
Here is a very partial list of possible deductions a typical flipper can claim, each year, whether in a startup phase or not:
Interest on business loans.
Advertising and marketing costs.
Costs of an assistant or laborer (but not while they’re renovating a property, in which case labor costs are added to your basis).
The home office deduction (technically, “business use of your home”).
Mileage you drive checking on properties, scouting new neighborhoods, or meeting with buyers, sellers, vendors, agents and advisors. You can take 55.5 cents per mile you drive for business purposes. Keep a log and an appointment book in case the IRS audits you.
Business legal expenses (not personal expenses).
Tax preparation fees.
A salary for yourself as an owner/employee of a corporation (if you have a corporation).
Local and state taxes.
Office supplies. But not capital equipment such as printers and computers, unless you can get it in under Section 179. Remember, you must depreciate computers over five years.
Health insurance for yourself as the owner/employee and your staff, if any.
Lawn maintenance charges on business property (but not landscaping fees, which are probably a capital investment).
Office space, if you lease an office other than your home.
Note: If you’re running your flipping business inside a self-directed IRA or other retirement account, then none of these are deductible, simply because there’s no taxable income from flipping operations to deduct.
If you're like many of us after filing taxes, you're wondering what you can do to take advantage of more deductions next year and how to lower your income-taxes. If you already own a home and are claiming deductions there, you may want to consider investing in real estate to reduce your tax-burden. Feel free to contact me on how to qualify for an investment property or for access to hard-money lenders in the Philadelphia area (and how to still meet your income / profit goals even when utilizing a hard-money lender). Wondering exactly what you can deduct when flipping a property? Take a look below (and remember to contact your CPA for specifics or tax-related questions).
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