Gina Farrell

Indepenent Funding Group

  • Home
  • About
    • About Us
    • Privacy Policy
  • Blog
  • Resources
    • First Time Home Buyer Tips
    • First Time Home Seller Tips
    • Closing Costs
    • Home Appraisal
    • Home Inspection
    • Loan Checklist
    • Loan Process
    • Loan Programs
    • Mortgage FAQ
    • Mortgage Glossary
  • Search for Homes
  • Apply
    • Apply Now Short Form
    • Download Application
  • Contact

How To Keep Records For Your Real Estate Business

March 3, 2020 by Gina Farrell

How To Keep Records For Your Real Estate BusinessAnyone who is looking to build a successful real estate business needs to keep meticulous records. When buying and selling property, there are a lot of tax and legal responsibilities. While some people may not want to think about this issue, the IRS may audit a real estate business. In this case, it is critical to have documentation that demonstrates proof of income as well as any credits or deductions that might have been claimed.

Some of the most common deductions that are claimed in the real estate business include depreciation, mortgage interest, repairs, insurance premiums, administrative costs, and property taxes. In order to keep records for a real estate business, there are a few categories to consider.

Improvements That Have Been Made To Properties

There are two ways that someone can deduct the costs of improvements or repairs made to properties. First, someone can deduct the entire cost of the expense during the year that it was incurred. This means the cost of materials, labor, storage, and more. 

The other way that someone can claim this deduction is to depreciate its cost over a predetermined period of time. This time period is going to depend on the nature of the repair. In this case, the depreciation period would begin on the date the repair or improvement is made.

The Cost Of Cars, Mileage, And Parking

Another key category is mileage and parking. There are plenty of people who use a car to get from place to place. If this car is used for work purposes, it can be claimed as a deduction. In order to keep proper records of mileage and parking, it is important to keep either a digital or paper log for the purposes of each trip. 

Then, with the number of miles driven in hand, this can be multiplied by the suggested mileage rate provided by the IRS. The grand total can be deducted from someone’s gross taxable income that year. The alternative way to calculate this is to forgo the standard rate issued by the IRS and deduct the cost of gas, maintenance, and depreciation of the vehicle. Some people like to calculate the deduction both ways and use the larger total. Just be sure to have records to support this claim.

Remember that partenering with a trusted home mortgage professional can be a great asset for your clients and generate referral leads for your business.

Filed Under: Real Estate Tagged With: Real Estate, Real Estate Business, Record Keeping

Gina

Contact Gina


Sr. Loan Consultant
Independent Funding Group
CALL 714-931-3541

NMLS #296734
DRE#02060065
GET A RATE QUOTE  

Connect with Me!

How can I help?

  • This field is for validation purposes and should be left unchanged.

Calculate Mortgage Payments

Mortgage Calculator

Browse Articles by Category

The Latest Articles

  • Key Points To Note When Drafting A Contract For A Remodeling Contract
  • Three Inexpensive Makeovers That Will Boost Your Home’s Appeal to Young Buyers
  • An Overview of Amortization: It Plays A Role In Monthly Mortgage Payments
  • DIY Lovers: ‘Greenify’ Your Home with These Three Eco-friendly Home Improvement Projects
nmlsconsumeraccess.org
Equal Housing Lender

Our Location

202 Fashion Lane, Ste 106
Tustin, CA 92780

Copyright © 2021 · Powered by MySMARTblog