Apartments for Cheap

Questions and Answers

Your Questions About Duplexes For Rent

March 11, 2012

David asks…

Where can I find good renters in michigan?

we have a duplex to rent out and want to know where other landlords have sucessfully found reliable tenants who treat the property with respect. we are in south-west michigan. thank you for suggestions!

Administrator answers:

I don’t think there is a way to predict that a tenant would “treat the property with respect”. The best you can do is to run a tenant screening reports and verify references. I use, and, I guess, there are other companies that could provide similar service.

Sharon asks…

Do I issue 1099s for work done on rental property?

I own a duplex and rent out both units. Do I need to issue 1099s to all the independent contractors who performed work on the property this year? What if an independent contractor performs several different tasks that total over $600 but no one task is greater than $600? If I was suppose to issue them for 2007 but didn’t, what should I do? What is the penalty? Thanks very much!

Administrator answers:

I don’t know the penalty.

The 600 limit is for the whole year, not per task.

Steven asks…

If the tenant pays for utilities can the landlord legally use the services without permission?

i.e. water for watering the lawn? Currently renting a duplex and will come home to see the landlord watering the lawn with the water from the duplex I rent?

Administrator answers:

If the tenant pays his own water bill the landlord cannot use it for watering the lawn.

Michael asks…

Investment properties on tax returns question?

I am married filing jointly. We have the house we live in and two duplexes we rent out. How do I do this on my taxes? Do I need to do a seperate business tax filing for these?

I technically started a business with a tax number (mid year) but I think it would be easier just to do it in my personal taxes until next year.

If this matters: Our house in in my wifes name, one investment property is in my name, the other is in both names.

Administrator answers:

You don’t stand a chance of filing an accurate return and claiming all the tax benefits that are available for investment and business expenditures.

Hire someone who knows what they’re doing. That is, of course, if the success of your investments and the success of your business is of any importance to you.

You don’t even know if you need a “separate business tax filing for these?” First of all, investment property is not a business. There is a huge difference. Not understanding how the laws work is a receipe for guaranteed tax disaster.

No, you didn’t “technically” start a business just because you applied for an EIN. You technically start a business when assets and procedures are in place and the business is operating as a going concern. An EIN (which you probably don’t even know why you applied for) is just one of many factors involved.

You don’t get to choose which year you report income and expenses just because it would be “easier.” Holy smokes. Get professional assistance proto.

I’m not trying to be a jerk. It’s just that I see people with terrible tax headaches after they threw huge amounts of money down the toilet because they had no idea what they were doing with taxes.

You have two investment properties and a business, and no clue how taxation works. With both investments and business, expense amounts can carry over year after year, or be lost altogether, if you don’t properly set up your tax compliance plan and implement and operate it properly.

Until you have inside-out knowledge of:

- Start-up costs
- Organizational costs
- Depreciation
- Section 179 deduction
- Mixed-use property rules
- Self-employment tax
- Health insurance costs for self-employed individuals
- Estimated tax
- Proper reporting and filing procedures

…don’t try this. Believe me, buying an off-the-shelf computer program won’t magically turn you into a tax expert. If you don’t get assistance from someone who knows what they’re doing, you’ll have nothing but headaches and lose money, guaranteed.

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