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Partial rental income and expenses in the inherited protery

Forum|Forum|4 years ago
January 14, 2022
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Mother passed away and inheited a house in Feb. Then rented out about 20% of the house for 6 months and sold the house in Dec. 80% of the house was empty. I paid the $6000 of property tax. Total rent in the year was $3000.

In sked E, I report $3000 as rental income, but what about the expenses?

Can I report $1200 (one fifth of $6000) as property tax expense ?

Best answer by AmyC

Thanks for the repsonse, I am not sure what was my case. After mother passed away, it was empty, I need some one to use the propery while it was on sale for about 2 years. Finally sold and try to figure out the expense if I can. I do not have any expense claim except the propery tax. Rent income was small compared to the high property tax.

My question in my case, can I use the property tax as expense. If yes, all of it or only 20%? I think it is reasonable to use the 20% of propery tax as expense.

If you rented the whole house for less than fair rental, you would not list the house as a rental. Since you rented 20%, that could have been a room you rented and tried to rent more. Not knowing any more of your story, the 20% property tax deduction for the 20% rental makes sense if you qualify to claim the rental. Again, please see Publication 527 (2020), Residential Rental Property for full instructions for your situation.

Begin first with -Did you hold out the whole house for rent?

AmyC

Employee

Can you clarify? The treatment is different on1041 for the estate vs your personal 1040. For the 1041, all expenses of the estate are deductible on the return while on the personal return, we need to know if the 80% not rented was used for personal purposes or could have been rented or was not available due to the rental.

See:

Topic No. 415 Renting Residential and Vacation Property

Publication 527 (2020), Residential Rental Property

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H

hpaik100Author

Actually mother passed away in Feb 2020 and rented out part of the property in 2020 and 2021. Mother used to live there untill she passed away. Instead of keeping the empty house, I rented out about 20% of the property and I did not any tax on the estate since the estate is small. I filed the 2020 1040 tax with rental income without any expenses and a little bit of depreciation. I did not file 1041.

For 2021 1040 tax, I thought I might be eligible for expense of property tax.