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Can I deduct HOA fees & Taxes for investment property.

Forum|Forum|3 years ago
October 23, 2022
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The land is raw land. Will not be rented. It sits in front of my vacation rental property.

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Best answer by Anonymous_

The land does not appear to be property held for personal use and, at least, should be considered to be held for investment purposes.

Further, since the land is adjacent to the rental house, it could be considered part of the total rental property and, if so, any HOA fees (that do not include fees for improvements) could be deducted as rental expenses.

Frankly, I would suggest that you seek guidance from a local tax professional who can actually review the exact layout of the property and exactly how you are using (including advertising, etc.) the rental property.

leeloo

While property taxes are deductible for any number of properties, HOA fees are not deductible unless the property is used for production of income.

A

astridwilsonAuthor

So, is it a stretch to say that the land enhances the Vacation rental and therefore produces income?

M

Mike9241

if the land enhances the value then the rent charged should reflect (higher) the enhanced value.

Carl11_2

Employee

You say the land "sits in front of" your vacation rental property. To me, that indicates that it's across the street from the property and "could" puts it's investment use in question for all I know.

If the land is available for the exclusive use of your short term tenants, and is specified as such in the rental agreement, then you can include the property taxes, HOA fees and mortgage interest on the SCH E. But being across the street (assuming my assumption is correct) the only way I would see it as useful for short term tenants, would be for something like vehicle parking.

Otherwise, the property is personal use and you can only deduct property taxes and mortgage interest (subject to SALT limits) as a SCH A itemized deduction.

Critter-3

Even if you wanted to or could consider the land part of the rental LAND is a non depreciable asset so there is nothing to deduct or depreciate of the purchase cost.