Residential real estate has a max of 27.5 years of depreciation. Typically the purchase price, but can increase based on improvements.Īccumulated & Annual Depreciation: Depreciation allows the client to spread the tax deduction for the property purchase over time. Total Tax Basis: Original cost basis of the property, excluding any depreciation. Pro-tip: If your client owns property outside of the US select 'Non-U.S.' for location - this will turn off tax calculations on the rental income and capital gains tax will not be applied upon selling this property. Location: Determines the state taxes if clients relocate to the investment property. Be careful not to double-count insurance, as the property may be covered by other insurance types.Īnnual maintenance: Total deductible maintenance costs for the property. This value will be used in retirement projections and tax projections.Īnnual property tax: The amount the client pays in taxes on the property.Īnnual tax increase: The property tax will increase by this percentage annually.Īnnual insurance: The amount the client pays in homeowners insurance. This may be taken from industry data, historical data, or some other source. Purchase price: The amount the client paid for the home at the time of purchase.Ĭurrent value: An estimate of the current market value for the home.Īnnual appreciation: The rate at which the property's value will be estimated to increase or decrease moving forward. Select Calendar year to specify the year the home was purchased, or select Client's age to select how old the client was when the home was purchased. The other two options allow you to enter the specific time of purchase. Purchase Year: Defaults to Already Started, which simply assumes the client purchased the home sometime in the past. Owner: Specify if the home is owned by the client, the co-client, or owned jointly. Income flowing from investment properties will populate line 5 of Schedule 1 within Tax > Tax Estimate > Details > Schedule 1-3. Investment properties added to the Net Worth allow advisors to demonstrate the value of the home as well as monthly maintenance, rental income & vacancy rates. Use Add Account > Property to add additional properties - either an Investment Property or Vacation Home.
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