2009 FEES FOR RENTAL PROPERTY

 For many years the IRS has paid little attention to rental properties, including those which generate a loss. Whereas a taxpayer who had a loss incurred through a small business was almost guaranteed to have a greater than average chance of being audited, a rental owner with the same loss from property had almost no chance of being scrutinized.

That has all changed. Finding rental property losses to be a rich source of additional tax revenue, these losses have come under tight scrutiny. Audits of rental properties have changed from relatively simple affairs to complex examinations, requiring taxpayers to produce bank records and subjecting all other aspects of their personal financial lives to scrutiny.

Because of this intense, new IRS scrutiny we are bringing rental fees more into line with small business fees, as outlined below.

 INITIAL RENTAL SETUP FEE will be $50

This fee will be charged, in addition to the basic fee of $350 and the appropriate rental fee from the table below, on all rentals acquired or placed into service by existing clients, and all rentals owned by new clients. The fee is to cover time spent in calculating, arranging or transferring depreciation on these properties, as well as improvements or personal property placed into service along with the real property. In addition, unlike most tax preparers, we break down and either amortize, deduct  or capitalize, as appropriate, every expense on the settlement statements for purchase of the property. We will do the same for future refinances of the property, but there will be no additional fee for this service.

REGULAR RENTAL FEES

The fees below are based on NET rental income. This is the number, for each rental property, after all income, expenses and depreciation has been taken into account. This is the number on which IRS examinations have been based in recent years.

You would be wise to heed my advice and read about rental property here.