10 Advantageous Tax Breaks For Landlords

When you manage a real estate portfolio of any scale, keeping accurate records is a must – especially when it comes to tax time. It’s no secret that top-notch organizing is directly connected to your bottom line.

By having the correct records and know-how, you can claim the most tax breaks accurately and legally, keeping you in good standing with the IRS without missing any opportunities to save money. Every dollar counts, so let’s find out what are the 10 best tax breaks landlords can grab.

1. Mortgage Interest

Investors that use loans to purchase real estate make regular mortgage payments that generate substantial interest – especially at the beginning of the loan term. Deducting this large sum can be a great help in reducing your taxes owed, especially if you plan to itemize taxes.  claim on your rental real estate property. Interest from a HELOC also belongs to this category.

2.  Straight-Line Depreciation

All buildings lose useful life as they get older. In the tax world, residential buildings depreciate over the span of 27.5 years and commercial buildings 39 years. This figure, created by the IRS, allows landlords to deduct 1/27.5 of a residential property’s value per year and 1/39 of a commercial property’s value. This simplified method is a safe route for landlords to take when they are unsure about different rates of depreciation within their properties.

3. Segmented Depreciation

Instead of using the standard depreciation rate for buildings, landlords can also claim components of their properties that depreciate at different rates. Essentially, you don’t count your property as one asset but split it into multiple assets that depreciate at different rates.

Segmented depreciation allows landlords to claim more accelerated rates of depreciation on certain parts of rentals, like fences, flooring, and appliances. In fact, investors that take advantage of this type of depreciation can claim more on expenses that wear out more quickly than the building as a whole.

To make it simpler to calculate depreciation rates, the IRS created the Modified Accelerated Cost Recovery System (MACRS) to calculate depreciation rates within investment properties.

With MACRS, you can claim appliances, carpeting, and furniture as fully depreciated after 5 years, equating to ⅕ of its cost claimed per year. Compared to 1/27th, that’s significantly more write-offs that allow you to stay on top of vital tasks like carpet replacement and much more. When you replace these assets, you may begin the 5-year depreciation process again.

4. Loan Fees

If you buy an investment property with a loan, then you can deduct many loan-related fees that include closing costs, origination fees, and points paid down. Since it’s difficult to identify what fees are deductible on your own, consult a tax professional to make sure that you’re claiming the right numbers, especially if you bought more than one property in a year. This will ensure that your tax return abides by IRS regulations and that you will have the least chance of delays after filing.

5. Repairs And Maintenance

Rental investments need regular upkeep throughout the year. On top of that, they can experience unexpected repair emergencies. Whether you need to pay for lawn mowing, fixing a broken faucet, or pay for any other upkeep like hvac servicing, these costs can be written off during tax time. So, if your unit needs a new coat of paint, it is possible to recoup expenses like these to give your budget more wiggle room.

6. Casualty Losses

If your investment property experiences loss from theft or physical damage, then you can potentially claim them as business expenses. There are strict guidelines and limitations regarding what you can claim as loss, so speak to your tax pro to get the specifics. When you can claim these losses, it can recoup the costs of fixing your rental property and keep costs manageable for your portfolio.

7. Eviction Legal Fees

Evictions cost a lot of money. Court proceedings can make a large impact on your rental business. On top of losing rent, taking legal action against a tenant adds up to a lot of court fees and attorney costs. Thankfully, you can deduct some of these eviction-related legal expenses.

If your rental business depends on outsourcing property management, new resident placement fees, legal fees, accounting fees, and other business expenses related to paying other pros to help (who aren’t your employees) can be deducted as professional services fees.

8. Driving And Transportation

One thing  new landlords don’t expect is the large amount of driving that is involved with the lifestyle. Whether you need to see your tax pro, go to the bank, pick up supplies for repairs, meet with business partners, or simply drive to your properties for an inspection, the miles add up quickly. According to the IRS, you can claim a standard mileage rate of $0.655 per mile. Check to make sure you are logging your miles according to IRS standards to ensure your numbers are accurate.

9. Utilities

If you pay any utilities for your rental units, such as gas, electric, or trash pickup, then you can claim these costs on your tax return. Ensure that your rental income doesn’t include utility reimbursement first.  Claiming utility expenses can reduce your tax bill and create a better outcome for your year-end tax filing.

10. Property Taxes

As a landlord, you pay property taxes on every property in your portfolio. These expenses add up quickly, which makes it good news that you can claim them on your taxes. To get accurate numbers, check with your tax professional to claim the right amount of property taxes for your portfolio.

The Bottom Line

There is so much more that can be added to this list to further specify the type of savings you can claim on your taxes as a landlord. For complete and up-to-date information, seek a certified CPA today.

Free Business And Real Estate Investing eBooks

Contact Winston Rowe and Associates

Welcome to Winston Rowe and Associates knowledge blog, scroll down to the right for posts about commercial real estate.

This is a list of free books about real estate investing, commercial real estate financing and business strategy.

We’re always on the lookout for great free books so bookmark this blog and check back for monthly updates.

These links are not affiliate marketing links, just publications that we feel may add value to people and businesses.

Commercial Real Estate Finance

The eBook Commercial Real Estate Finance, by Winston Rowe & Associates discusses the fundamentals of the different types of commercial property, the various options that are included with properties and the capabilities that you will have as a commercial property investor.

Real Estate Investing Articles

This is a link to 1226 real estate investing articles written by industry veteran’s.

25 Productivity Tips for Successful Business Owners

Productivity is critical to your success at work. Business owners, managers and executives all want to get the most from their employees. If you’re not performing as efficiently or effectively as others, your long-term job prospects could be in trouble.

Real Estate Investing: How to Find Cash Buyers and Motivated Sellers

“Real Estate Investing: How to Find Cash Buyers and Motivated Sellers” teaches real estate investors and those interested in learning to invest in real estate how to define and target ideal cash buyers and motivated sellers. The book covers absentee owners, rehab investors, Section 8 landlords, and other buyer types. Some of the marketing topics include mailing lists, postcards, both online and offline marketing strategies along with examples. Anyone who wants to wholesale a house or is curious about flipping houses should pick this book to get educated on cash buyers and motivated sellers for their real estate investing.

Real Estate – Breaking Bad How to Flip Decaying Real Estate Properties for Profit

Tired of working 9 to 5? You should think of making money with real estate! Yes, the effort is well worth it! You just have to ditch the misconceptions and embark with all the passion you have in store for this amazing trip of rehabbing old houses and giving them a new look and a new owner.  Your reward? A nice profit!

Real Estate Forms Portfolio

A FREE and ready-for-download eBook consisting of a comprehensive collection of real estate-related forms for real estate investors.

Real Estate Secrets Exposed

This FREE e-Book sheds some light on the often mysterious and sometimes daunting world of real estate.

Use 1031 Real Estate Exchanges to Create Multiple Streams of Income

Discover how to use 1031 tax-free exchanges, tenants in common interests, and zero cash flow properties to create new sources of income. Learn how to offer bundled services and attract new clients. This FREE, ready for download eBook is perfect for anyone involved in real estate, taxes, mortgages, insurance, or law.  Download it now!

Make Money Through Real Estate Renovations

Download this FREE eBook and learn how a successful investor makes thousands of dollars from real estate renovations. Download it now!

Discover the Secrets of How to Fund Your Real Estate Deals with Private Lenders

Download this FREE e-Book, and discover the new secrets of funding real estate deals in the post-bubble real estate market, where traditional lending sources are getting very difficult to obtain. Download it today!

Real Estate Investing Strategy for Rehabs

This eBook is about residential rehabbing and the multiple strategies that can be used to maximize profits in this current economic climate. My goal has always been to share knowledge with folks that are truly interested in rehabbing and view it as not only for monetary gain but also see is as an “art and science” like I do. Happy Rehabbing!!

How to Be A Super Property Investor

A FREE, step-by-step guide that will help you become a super real estate property investor. Learn all the basic and some advanced investing techniques that have generated millions for property investors. Ready for download now!

Financial Terms Dictionary – 100 Most Popular Financial Terms Explained

This practical financial dictionary helps you understand and comprehend more than 100 common financial terms. It was written with an emphasis to quickly grasp the context without using jargon. Every terms is explained in detail with 600 words or more and includes also examples. It is based on common usage as practiced by financial professionals.

The Prince by Niccolò Machiavelli

Niccolò di Bernardo dei Machiavelli was an Italian diplomat, politician, historian, philosopher, writer, playwright and poet of the Renaissance period. He has often been called the father of modern political philosophy and political science.

The Science of Getting Rich by W. D. Wattles

This book is pragmatical, not philosophical; a practical manual, not a treatise upon theories. It is intended for the men and women whose most pressing need is for money; who wish to get rich first, and philosophize afterward. It is for those who have, so far, found neither the time, the means, nor the opportunity to go deeply into the study of metaphysics, but who want results and who are willing to take the conclusions of science as a basis for action, without going into all the processes by which those conclusions were reached.

Sun Tzu Art of War

Written in the fifth century B.C., Suntzu and Wutzu still remain the most celebrated works on war in the literature of China. While the chariot has gone, and weapons have changed, these ancient masters have held their own, since they deal chiefly with the fundamental principles of war, with the influence of politics and human nature on military operations; and they show in a most striking way how unchanging these principles are.

Make Extra Money Flipping Houses While On Vacation by Jason Medley

Reveals his simple and proven systems to automate, delegate and outsource nearly every function of his business except cashing his checks. He shows the exact steps that has allowed him to go on multiple vacations with his family throughout the year while having his system continue to flip houses for him.

Achieving Wealth Through Real Estate: A Definitive Guide To Controlling Your Own Financial Destiny Through a Successful Real Estate Business

Have you ever thought about making money with real estate? In Achieving Wealth Through Real Estate: A Definitive Guide to Controlling Your Own Financial Destiny Through a Successful Real Estate Business, author and entrepreneur Kirill Bensonoff takes you through the process of starting your own real estate business step-by-step, featuring his expert tips and tricks.

Business Loans Uncovered

Knowing if you qualify is one of the most important things to know when applying  for a loan of any type. Blindly applying for a loan and being declined increases the chances of you being declined again and again because you not only lower your credit score each time you apply, multiple inquires also serves a red flag to other lenders and as a result lenders put you in a high risk category and charge higher interest rates in the event of an approval Includes: ​Traditional Lenders, Government Sources, The 7(a) loan guarantee program, SBA Low Doc loan program, SBA Express loan program, Factoring, Venture Capitalists, Angel Investors.

50 Simple Secrets To Be A Happy Real Estate Investor

Discover the secrets used by successful real estate investors to create happiness in their lives and businesses. Naturally create more happiness for yourself by implementing time-tested secrets to happiness used by other real estate professional and investors just like you. Start to experience more productivity, satisfaction, and success immediately.

50 Simple Secrets To Be A Happy Real Estate Investor

Discover the secrets used by successful real estate investors to create happiness in their lives and businesses. Naturally create more happiness for yourself by implementing time-tested secrets to happiness used by other real estate professional and investors just like you. Start to experience more productivity, satisfaction, and success immediately.

Marketing Strategies for Real Estate Photography

One of the biggest problems that real estate photographers have once they have set up their business as a legal entity, obtained all the right equipment and perfected their technique is obtaining new clients.

Clients and customers are the lifeblood of any business, but how do you obtain new clients after starting your business?

By developing and executing a strategic marketing plan tailored to your business.

This short guide has been written to help real estate photographers develop their marketing plan and assist with winning new business.

It includes a series of digital and direct marketing strategies along with useful tips and lessons the author has learned from his own experiences that can save you time and money when growing your business.

A marketing action plan template has been included to help photographers execute the strategies learned in this guide book.

Books by Dr William Edward Deming

William Edwards Deming (October 14, 1900 – December 20, 1993) was an American engineer, statistician, professor, author, lecturer, and management consultant.

Educated initially as an electrical engineer and later specializing in mathematical physics, he helped develop the sampling techniques still used by the U.S. Department of the Census and the Bureau of Labor Statistics.

In his book The New Economics for Industry, Government, and Education Deming championed the work of Walter Shewhart, including statistical process control, operational definitions, and what Deming called the “Shewhart Cycle, which had evolved into Plan-Do-Study-Act (PDSA). That was in response to the growing popularity of PDCA, which Deming viewed as tampering with the meaning of Shewhart’s original work.

Deming is best known for his work in Japan after WWII, particularly his work with the leaders of Japanese industry. That work began in July and August 1950, in Tokyo and at the Hakone Convention Center, when Deming delivered speeches on what he called “Statistical Product Quality Administration”.

Many in Japan credit Deming as one of the inspirations for what has become known as the Japanese post-war economic miracle of 1950 to 1960, when Japan rose from the ashes of war on the road to becoming the second-largest economy in the world through processes partially influenced by the ideas Deming taught

Top Real Estate Depreciation Tips


Depreciation is a double-edged sword. It’s a big part of why real estate works so well with leverage as an investment. Taking the depreciation allowance on investment property is a critical part of the attractiveness of real estate investing, from the point of view of the cash-flow investor. But the rules governing depreciation are notoriously baffling, and occasionally trip up even tax professionals.

With tax time on the horizon, here are some tips on depreciation for real estate investors There are lots of articles out there explaining the basics of depreciation and amortization, but the best of them is still the IRS publication on How to Depreciate Property.

There are fewer articles out there that specifically outline some of the traps and landmines that surround depreciation and give the property owner some concrete tips on how to avoid them. So I decided to put some tips together here:

1. The “Use it or Lose It” rule is in effect! You must be on the ball when it comes to claiming allowed depreciation each year. This is because if you neglect to claim depreciation in one year, you cannot “double it up” in the following year to catch up. You may be able to file an extended return, but if you’ve made the same mistake two or more years in a row, and it was because you chose the wrong method, rather than a simple math error, you might have to file for a change in accounting method, using IRS Form 3115.

Furthermore, when you sell a property, the IRS will force you to subtract all allowable depreciation from your basis, and calculate capital gains taxes based on that, even if you did not claim the depreciation!

Think that hurts? Here’s another twist of the knife: If the IRS recaptures depreciation in this way, the amount recaptured is not taxed at capital gains rates, but at ordinary income rates.

2. The Section 179 deduction and accelerated depreciation is nice – but remember that it doesn’t count for real estate. Real property is not eligible for Section 179 deduction. Your real estate transactions have to make sense even if you don’t get much in the way of first-year deductions.

3. Be careful with taking big Section 179 deductions if you are the owner or part-owner of a fiscal year corporation or partnership. Yes, the corporation can deduct up to $500,000 in equipment. But currently, owners can’t take advantage of the full amount in practice. They can only deduct $25,000 of anything that flows through a K-1 report in tax years beginning after 2013.

4. Tax year 2013 is the last year for bonus depreciation under Section 179.

5. Remember that land doesn’t depreciate. Just the building. So you have to separate out the value of the building from the land. Generally, the IRS will accept your local property assessor’s judgment, so you can use that document to back up your own calculations.

6. Land doesn’t depreciate. But landscaping does!

7. Did you plant anything on investment property? That’s depreciable over 15 years, under MACRS rules. Fruit and nut-bearing trees are 10-year property.

8. Spouses are not depreciable. But livestock is!

9. Don’t forget: If you’ve made improvements or renovations to an investment property, you can keep depreciating the cost of those improvements even after you have already fully depreciated the original cost of the home.

10. Try to get your renovations done and property into rentable service, or capital equipment into use prior to the last quarter of the year. This helps you avoid or minimize the negative impact of the mid-quarter convention. This is a special tax rule that applies if the IRS notices you crammed at least 40 percent of your depreciable property into service in the last quarter of the year. This is their way of keeping you honest and preventing you from claiming six months’ worth of depreciation on assets you place in service in the last few days of the year.

11. You can’t claim depreciation on your personal residence. You do get an exemption from capital gains taxes, though, ($250,000 for singles or $500,000 for married couples) if you meet the ownership and use tests.

12. Do you have a home office? It depreciates under a different schedule than ordinary residential property. The portion of your home committed to business use is depreciated like commercial property, not residential property. This means that it uses a 39-year depreciation schedule, rather than a 27.5-year schedule.

Heads-up: If you have been claiming a home office deduction, and then you sell your home, you will probably get smacked with something called the depreciation recapture tax. You can defer that tax by using Section 1031 like-kind exchanges, but it is very difficult to avoid it altogether. Note that even if you never claimed the depreciation, the IRS will still tax you as if you had!