I am buying my first home to use as a rental home. Are there any tax benefits for rental properties or any other programs for investment buyers that I can take advantage of?
=====ANSWER===== Hello Mr. Been,
Thank you for coming by my website and asking a question. It is certainly a great question. However I'm not able to offer legal or tax advice.
What I did is look up the answer at IRS.gov for you. Below you will find a link to their website.
I have owned and rented several homes in the past. There are a number of tax benefits for doing so, I'm just out of touch since it's been awhile for me. I sold off all my properties back in the late 90's.
It is a good time to buy investment properties right now with the values so low. So I congratulate you for jumping in the market.
To give you a brief summary, this is what I understand it to mean.
It seems that the IRS considers cash or the fair market value of property no matter if real property or real estate as taxable income to you. You can deduct expenses of rental property. The are reported on form 1040 shcedule E.
Since most people operate on a cash basis, when rental income is received it is considered income for that month. The same goes for expenses, when you spend the money it's a deduction.
There are different expense you can deducted from rental income like depreciation, repairs and other kinds of operating expenses.
There are some special rules that you would want to pay attention to. Be sure to ask your accountant or tax person.
Just give that link above a visit for much more details.
Hopefully you find this helpful. You will need to seek the advice of a tax professional next year when you prepare your taxes to see how much you can save.