Commercial real estate property owners and investors can experience major tax write-offs and benefits, but only if they know what they are doing. Unfortunately, many investors and property owners miss out on some of the tax-deductible real estate business expenses and end up paying more than they need to. Here are some of the tax deductible real estate business expenses every investor or property owner should know about.
5 Tax Deductible Real Estate Business Expenses
- Start-up Costs: If you are just starting your real estate business, you could be eligible to deduct some of the costs. If you spend over $50,000 on accounting fees, training and salaries for new employees, and office equipment and furniture, you might be able to deduct a portion of it.
- Costs of Finding New Properties: If you are a commercial real estate property investor or owner, you can deduct some of the real estate business expenses that you incur when looking for a new property. Rental car costs, meals, airfare, and hotel costs can all be tax-deductible providing that you keep the receipts and they are ordinary and necessary.
- Internet and Cell-Phone Costs: Do you use the internet and a mobile device as part of your real estate business expenses? Most companies do, and providing that you separate your personal and business usage, you can deduct some of the expenses. Your accountant can determine the exact amount you are eligible to deduct and ensure that everything is documented properly.
- Suspended Passive Losses: If you own a real estate rental business, you can write off real estate business losses or rental losses against your income. Depending on your tax situation, it might also be preferable to deduct your rental property losses in the future through suspended passive losses. These losses can be carried forward until you have enough income to deduct losses again or you sell or transfer the property.
- Property Maintenance: Regular and occasional property maintenance costs are covered as part of your real estate business expenses. Some of the maintenance costs that can be deducted include gutter cleaning costs, pest control, HVAC repairs, flushing sewage lines, landscaping, and more.
Make Finances Easy at Your Commercial Real Estate Business with MKS&H
MKS&H provides tax and accounting services to businesses of every size and in every industry, including construction and commercial real estate. We can work with you to improve your company and make sure that it is financially secure now and in the future. Contact us today for a consultation.
About MKS&H: McLean, Koehler, Sparks & Hammond (MKS&H) is a professional service firm with offices in Hunt Valley and Frederick. MKS&H helps owners and organizational leaders become more successful by putting complex financial data into truly meaningful context. But deeper than dollars and data, our focus is on developing an understanding of you, your culture and your business goals. This approach enables our clients to achieve their greatest potential.