Investment Property Tax Deductions List for Fort Worth

Uncle Sam gives with one hand, but takes with the other, especially when it comes to buying investment properties in Fort Worth. But did you know that you can avail of investment property tax deductions for your Fort Worth holdings? As a real estate investor, the US offers a great opportunity to earn a living through purchasing and holding investment properties, but don’t forget about the taxes. Many new investors often overlook the tax deductions that could greatly impact their bottom line. Here are some tax benefits that Fort Worth Texas real estate investors should know about.

Deductible Income Sources

Expenses paid by tenants

for repairs, such as emergency water heater repairs, can be considered income and deducted. If the tenant performs upgrades in exchange for reduced rent, these services can also be deducted as long as they are claimed as income and at fair market value. However, making a deal with the tenant for a light switch repair in exchange for three months of rent cannot be claimed as income.

Security Deposits

A security deposit is not taxed as it is intended to be returned at the end of a lease. But if the tenant breaches the lease and forfeits the deposit, you can claim it as income, provided that the deposit is used to make repairs, which are deductible expenses. Ensure that your accountant or property manager is handling the security deposit accounting correctly, so you don’t pay income tax on deposits that will eventually be returned.

Other Tax Deductions

The portion of your mortgage that is directed towards interest is 100% tax-deductible, and your lender will provide you with a form in January that states this total. Travel expenses related to the property, such as trips to make improvements, show the property, or collect rent, are considered work expenses and deductible. Tax deductions can also be claimed for taxes, insurance, preparation costs, lawn and garden care, losses from theft or natural disasters, legal and professional services, and property depreciation. If you run your real estate investment business from a home office, it may also help generate tax deductions, subject to minimum requirements. By availing of all applicable tax deductions, investment property owners can increase their revenue and reduce their tax liability, which opens up the possibility of acquiring additional properties. Talk to your financial advisor or CPA for more ways to decrease your tax liability and keep abreast of new tax deductions that Fort Worth investment property owners can claim. Ready to start investing in Fort Worth properties? Give us a call at (817) 382-1155, or join our Local Investment Property Buyers List.
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We are a real estate investment company that specializes in finding valuable real estate opportunities and honing in on them to revitalize our community, create thriving income properties, and partner with qualified investors to help them strive in the real estate market. Not only do we buy, sell, and fix homes for cash, but we are also the best source for North Texas real estate investors to find investment properties at an amazing price. We have worked in major cities across North Texas, such as Dallas, Fort Worth, and Waco. We’re constantly picking up new properties and always have properties available. We’ve made significant financial investments towards refining our marketing systems to what they are today. Buyers benefit from that by letting us find great deals and sending them their way.
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