Hello,
I am a new tax business owner, and purchased a Rent to own back in June to get prepared for tax season. I finished the inside so it looks like an office. Should I use the total purchase price or my monthly rent payment for tax purposes, And can I use all of my expenses for that purpose?
Thank you
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You will need to review the detail's of your contract and determine whether it would meet the IRS standard for a Purchase, or whether it should be treated as a lease.
If you are planning on owning it when the dust all settles, then you would want to record the purchase price and depreciate it.
You will need to review the detail's of your contract and determine whether it would meet the IRS standard for a Purchase, or whether it should be treated as a lease.
"And can I use all of my expenses for that purpose?"
No. You need to break out the assets into their various types, then follow what the IRS requires.
Absolutely! Also, remember you can spread out the payments over the life of the property. Amortize the property and remember to allocate only the deductions you need for the year. There is a cap on certain deductions per year. HY, 200DB, and 20 years are probably what you want to use. Check your total cost and see what accounting options are best for your situation. Congrats on the new office.
"remember to allocate only the deductions you need for the year"
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"HY, 200DB, and 20 years are probably what you want to use"
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just the monthly payments as you probably have an instalment sale
Once again
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Sorry, not sure what you are asking.
try instalment sale
SW is renting/buying, not selling.
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