Property Q&A in 95122>Question Details

Wi Guy, Home Seller in 95122

Do I have to make estimated tax payments on rent received even with a negative cash flow?

Asked by Wi Guy, 95122 Thu Jun 17, 2010

I changed jobs and transferred from PA to Wisconsin about a year ago. At the time I was confident that I could/would sell the home but that did not happen. We finally got a renter in the property a few months ago and have a negative cash flow (but at least the bleeding isn't as much as it was).

Do I still have to pay estimated taxes on the money I receive in rent? Bearing in mind the rent I receive is less than what I pay in mortgage plus I pay a percentage to a property management firm.

The next piece of the puzzle is, what happens if I can sell it next year? If I sell at a loss (I put a decent amount down so I'm not overly concerned about having to sell short; but if the economy doesn't really pick up I don't forsee a profit.) am I on the hook for additional taxes because of the negative cash flow this year?

Looking for some advice to keep my head above water AND avoid any surprises next April! THANKS!

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Answers

3
Talk to your accountant. With negative cash flow I don't see any taxable earnings, but your accountant can confirm that for you are not liable tax wise.
0 votes Thank Flag Link Sat Jun 19, 2010
Hi Wi Guy, Terri answered it well, you need to speak with a qualified tax advisor or CPA. Email me through my Trulia profile if you need a referral. Kind regards.
0 votes Thank Flag Link Fri Jun 18, 2010
This is best answered by your Tax advisor. We are realtors and your tax advisor knows financial status. If you need a referral let us know.
Web Reference: http://www.terrivellios.com
0 votes Thank Flag Link Thu Jun 17, 2010
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