Rental Income And Taxes....& Insurance
I'm getting ready to buy a rental property which is already under lease. When running my numbers to find my offer price, what do I assign for insurance purposes? Is there a general rule of thumb or %?
Secondly, and more importantly to me does rental income get taxed? Would I report this as income next year when filing my taxes? How does this work?
I'm not an accountant (but maybe one will answer your post), however, it's safe to assume that your rental income is taxable. You'll have rental expenses that will offset your rental income, but the income itself is taxable. If you have a rental business, I guess it'll just be considered business income. If you aren't set up as a business, it'll be added to your personal/ordinary income.
JSJ
As hard as the insurance market is, you may want to get a hard rate per property from an Agent familiar with REI. It's very tough to rule-of-thumb insurance today, unfortunately. Good luck. Tim[ Edited by norrist on Date 03/16/2004 ]
Quote:
On 2004-03-11 09:20, jeffm_60 wrote:
I'm getting ready to buy a rental property which is already under lease. When running my numbers to find my offer price, what do I assign for insurance purposes? Is there a general rule of thumb or %?
I was wondering the exact same thing regarding insurance Jeff. Anyone else have something to say about this?
Thanks,
pataz
Pataz, called my agent the other day and had him give me a quote on this condo. Minimum coverage is 6 bucks a month. 300k liability, 1,000 buidling, and 2k personal property. The increases are negligable and go up less than a dollar for much better coverage. Bump it up to 1 mil liability and you tack on 25 for the year - 2.08 monthly.