Own a house versus renting; expenses

[lets-retire]

So as I understand it and you explained it to us, depreciation on real estate is essentially a tax deferred income stream for 27.5 years, until you sell. So you essentially bought a co-op for 15,000 had zero income/loss from it year over year, which was really a tax deferred income, and are complaining that the ROI is only 5% because the property is only worth $145,000? When I work the numbers out, I understand and don't expect you to divulge all the details of your finances to some bozo on the internet, the interest is over 10%.

[mathjak107]

Well there were some years that were at a real losses as we had no tenent for a month or so here and there while waiting for board approval ,we had a bad tenent that stiffed us for 3 months,we had 8,000 in repairs and some renovations after they moved out. Overall it wasnt a good deal.About the best thing i can say about it is my son has been living in it the last year* for just the cost of the maintence while going to law school.

Did you deduct roughly 3800.00 in depreciation x almost 20 years that has to have the taxes paid back if i sold at rougly 25% federal 12% state and local?
its probley about 29,000 in taxes

oooouch.

[mathjak107]

Heres a little tid bit to remember when depreciatiing a co-op thats a rental:

A co-op is tricky as there are 2 parts to the value of your apartment. The first part is the price you paid ,the 2nd part is your share of the outstanding mortgage that the building has which you pay thru your maintaince payment. The 2 of them together equal your depreciation allowance. In the above example the total of the 2 was about 105,000.00

Another tid bit,,make sure you take the depreciation on your rental because whether you declare the depreciation or not you will have to pay the recapture at the end when you sell ,even if you never actually took it. Yep you will end up paying tax on money you never even got back.