Investment Property Tax Deductions List for Dallas Fort Worth


The government gives, and the government takes away.

Investment Property Tax Deductions List for Dallas Fort Worth
Investment Property Tax Deductions List for Dallas Fort Worth

But when looking at buying local Dallas Fort Worth investment properties… you can earn serious investment property tax deductions for your Dallas Fort Worth properties.

For investors, the United States allows for the opportunity to earn a great living purchasing investment properties… and then holding these properties as long-term investments. The best part is the income from these properties is taxed advantaged.

The problem is many newer investors often overlook tax deductions that could greatly impact their end of year profits. Today, we’re going to dig deeper and take a close look at Dallas Fort Worth TX real estate investors can take advantage of.

Income Sources You Can Potentially Deduct -Investment Property Tax Deductions List for Dallas Fort Worth

  • Repairs and expenses paid by rental tenants are defined and considered to be income. This could include anything from a emergency water heater repair to leaking plumbing. These repairs can be deducted from yur taxes at the end of the year.
  • In many cases, tenants will trade repairs and upgrades needing to be done to a rental unit for a reduction of rent. The answer is YES, these services can be deducted if they’re claimed as income, and charged at fair market value. You cannot work out a deal with your tenant to fix a light switch and claim it was 1,000 dollars to fix this is stupid and you risk getting caught.

A security deposit is however not taxable, because your intent is to return this deposit at the end of a lease. However, if a tenant ends up breaksing the lease the will have to forfeit their deposit, you will have the ability to claim the security deposit as income ony is the deposit is used to make repairs.

These repairs will be classified as deductible expenses.

Make sure with your CPA or local property manager that they’re handling your security deposit accounting the right way as that you’re not paying income tax on deposits that you’ll be turning around and paying back when a tenant vacates.

Some Other Common Investment Property Tax Deductions

  • The part of your mortgage that is directed towards interest is 100% tax-deductibleand can be deducted.
  • Travel miles to and from the property to make improvements to the home, show the property to a buyer, or collecting rent are all considered work expenses, and hence can be deducted.
  • Some deductible expenses that investors take advantage of are taxes, insurance, tax return preparation costs, landscaping care costs, losses resulting from theft or “acts of god” (floods, tornadoes, and other disasters), as well as legal and professional services.
  • Depreciation on the value of the property is also deductible and profitable. This can however be very complicated to calculate, and it’s highly recommended to speak with a local Dallas Fort Worth accountant.
  • Your home office, if  your runing your real estate investment business from home, this can help generate sizable tax deductions as well as the home office meets the minimum requirements (talk to a professional tax advisor)

By being smart and taking advantage of all the different tax deductions, investors can increase their profits and reduce their tax liability, resulting in the possibility to purchase more properties in a shorter time frame. There are other ways to minimize your tax liability. Talk to your financial advisor or CPA, as they stay current on new tax deductions that Dallas Fort Worth investment property owners can claim.


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Tax Deduction Resources

“Investment Property Tax Deductions List for Dallas Fort Worth”

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