Land Value of Townhouse for Depreciation?
Ted Hancock
Hello all,
My co-workers have been poking some holes in my
schedule E lately.
1) I assumed the land value of my end unit
townhouse/condo was $0 since it has no other use
without disturbing other property. The land value
was also not listed on the tax re-assessment this
year. How do I subtract out the value of the
land?!?
2) I got a fridge and washer&dryer with the unit and
no value was ever determined for them. They were
just thrown in. How do I depreciate these items
separately?
3) Can I count interest paid on a 401K loan as "Other
Interest" even though I'm sort-of paying it to
myself? What of the $75 origination fee?
Dang it, I thought I had this figured out. Thanks to
all of those who responded to my previous Schedule E
questions. At least TurboTax is not flagging anything
as audit material so far!
Thanks,
Ted
--
My opinions do not represent the views of Nortel.
Nortel 35 Davis Drive RTP, NC 27709-3478
Ted Hancock (919) 991-8425 han...@nortel.ca
Edward Zollars
"Ted Hancock" <han...@nortel.ca> wrote:
> 1) I assumed the land value of my end unit
> townhouse/condo was $0 since it has no other use
> without disturbing other property. The land value
> was also not listed on the tax re-assessment this
> year. How do I subtract out the value of the
> land?!?
As an agent once observed to someone I know "the unit
isn't sitting suspended in midair <grin>". You must
make a reasonable allocation to the value of the land.
Without the land, the condo wouldn't have much value.
> 2) I got a fridge and washer&dryer with the unit and
> no value was ever determined for them. They were
> just thrown in. How do I depreciate these items
> separately?
You would allocate a portion of the purchase price to
them based on their fair value when you purchased the
unit.
> 3) Can I count interest paid on a 401K loan as "Other
> Interest" even though I'm sort-of paying it to
> myself? What of the $75 origination fee?
Potential problem. Your 401(k) loan may not be
deductible at all, per IRC Section 72(p)(3) which
reads:
---begin quoted text
(3) Denial of interest deductions in certain cases.
(A) In general. No deduction otherwise allowable
under this chapter shall be allowed under this
chapter for any interest paid or accrued on any
loan to which paragraph (1) does not apply by
reason of paragraph (2) during the period
described in subparagraph (B).
(B) Period to which subparagraph (A) applies. For
purposes of subparagraph (A), the period
described in this subparagraph is the period --
(i) on or after the 1st day on which the
individual to whom the loan is made is
a key employee (as defined in section
416(i)), or
(ii) such loan is secured by amounts
attributable to elective deferrals
described in subparagraph (A) or (C)
of section 402(g)(3).
---end quoted text
Assuming the loan is secured by your elective deferrals
(very likely) or you are classified as a key employee
(not real likely, but possible), you can't deduct the
interest.
---
Ed Zollars, CPA Phoenix, AZ
ezo...@primenet.com
http://www.getnet.com/~hmtzcpas
helj...@aol.com
"Ted Hancock" <han...@nortel.ca> writes:
> At least TurboTax is not flagging anything
> as audit material so far!
But....even tho TT may not flag anything, that
has NO meaning if an IRS agent wants to flag
something.
Helen, EA in PA
Member of NAEA, NATP and the Tax Gang