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Income Tax Quiz for landlords


              Check your answers

1. Mortgage payments for a rental are:

A. Not deductible
B. Partially deductible
C. Deductible in full
D. A form of criminal extortion 		 

2. Rent unpaid by the tenant is:

A. Not deductible
B. Deductible as "bad debt"
C. Deductible as "rent", with "–" sign
D. Deductible as "entertainment"
 

3. Depreciation is:

A. A "free" extra deduction for landlords
B. Optional, you don’t have to use it
C. "Returned" when you sell the property
D. A serious medical condition 		 

4. Depreciation starts:

A. On the day of closing
B. On the day of "ready for rent"
C. On the day 1st lease is signed
D. On the day 1st tenant moves in
 

5. Cost of a new roof is deducted:

A. Immediately as "repairs"
B. Immediately as "advertising"
C. Through 5-year depreciation
D. Through 27.5/39-year depreciation 		 

6. Cost of your own labor is:

A. Never deductible
B. Depreciated over 27.5/39 years
C. Deductible in full, as "wages"
D. Deductible in full, as "other"
 

7. New dishwasher can be deducted:

A. In full, as "repairs"
B. In full, as "section 179" depreciation
C. Over 5 years
D. Over 27.5 years 		 

8. Receipt or other proof is required:

A. For entertainment & travel expenses
B. Only for expenses paid in cash
C. Only for major (over $250) expenses
D. For all business expenses
 

9. Closing costs are deductible:

A. Never
B. In small amounts, over many years
C. Up to the amount of cash at closing
D. In full, in the year of closing 		 

10. Initial rehab of a foreclosure property:

A. Always deductible in full, as "repairs"
B. Part repairs, part depreciable improvements
C. Must be slowly depreciated
D. Is a popular Mardi Gras activity

              Check your answers