Renting Water & Paying Taxes
We live in Virginia, but recently purchased a terrific condo on the water in FL. We will receive 3 mths of rental income (that covers the note and condo fees) in 2004. We incurred roughly $10k in expenses to fix it up to get it ready for rental. Will the income received simply be taxed as ordinary income? How sld I account for the $10k worth of expenses? Do I need to file any Florida tax forms? Thanks so much for your help. :-P
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In Florida you should be paying intangible taxes in the county the property is in.
As far as your federal income taxes are concerned, the $10K rehab cost is added to your cost basis and recovered through depreciation.
Your accountant can give you specific details.