Time period for expense and receipt data?
I think that the program calculates deductable and depreciated expenditures, and at point-of-sale, the capital gain taxes.
Does the data for expenses and receipts need to cover the same period of time as that representing the time since the property was placed in service? For example... I have just begun using ESP... I placed my rental house in service in 2004. For this program to work accurately, do I need to place in the data base the expenses and receipts for the period since I placed the unit in service (2004) or can I begin entering this data from now into the future... 2008 and beyond?
RSS
I think the only way it matters is if you use an annual appreciate rate for the property. ESPlanner, in general, is not concerned about past expenses and income (except for SSA related earnings). If you entered no mortgage and no expenses & receipts for the property and never sell it, it doesn't affect your consumption numbers at all (and it shouldn't). You just end up with real estate equity at the end.
You described that this has no impact if I don't enter any information about the rental property... regarding the mortgage, expenses, income... and if I don't ever sell it.
I am confused... are you suggesting that I don't use a feature of the program?
I do intend to sell the property... and I do expect there will be capital gains taxes... and that the amount of funds I invest in the property since I placed it in service, as well as the funds I spend in the future between now and the time I sell the property, will impact the elements of depreciation, deduction, and taxes.
I may be introuble here because I don't have a clear picture of what the program is intended to do.
From your response I gather that if I plan to sell the property in the future... and use the program % increase in property value to estimate future value... and this future gain when the property sells... that the program will not function as intended without all of the data... historical and future. Is that correct?
Help me understand what the program is expected to do... information it is programmed to generate... and to understand the inputs that are required so that the program can do this function accurately and completely.
Thanks.
HI, YOU JUST NEED TO CONSIDER EXPENSES AND INCOME FROM THIS POINT FORWARD. JUST FILL IN THE FIELDS IN THE REAL ESTATE SCREENS (WHICH DON'T ASK ABOUT PAST EXPENSES OR INCOME) AND YOU'LL BE ALL SET. BEST, LARRY
HI, I REPLY BELOW, BUT YOU SHOULD PROBABLY CALL ME AT 617 834-2148 TO HELP SORT YOU OUT ON THIS. BEST, LARRY
You described that this has no impact if I don't enter any information about the rental property... regarding the mortgage, expenses, income... and if I don't ever sell it.
I'M NOT SAYING THIS AT ALL. YOU NEED TO ENTER INFORMATION ABOUT YOUR CURRENT RENTAL PROPERTIES IN THE REAL ESTATE SECTION OF THE PROGRAM. WHAT YOU DON'T NEED TO DO IS WORRY ABOUT EXPENSES IN THE PAST, BECAUSE THEY ARE IN THE PAST. THE ONLY WAY SUCH EXPENSES MATTER IS THROUGH THE CURRENT BASIS OF YOUR RENTAL PROPERTY. IF YOU RENOVATED YOUR RENTAL PROPERTY IN THE PAST, THAT MEANS YOU NOW HAVE A HIGHER BASIS FOR THAT PROPERTY THAN WOULD OTHERWISE BE THE CASE. OUR SCREENS ASK YOU TO ENTER THE CURRENT BASIS. SO THIS IS THE PLACE THAT THE PAST ENTERS, VIA THE LEVEL OF THE CURRENT BASIS.
I am confused... are you suggesting that I don't use a feature of the program?
I do intend to sell the property... and I do expect there will be capital gains taxes... and that the amount of funds I invest in the property since I placed it in service, as well as the funds I spend in the future between now and the time I sell the property, will impact the elements of depreciation, deduction, and taxes.
RIGHT, AND FOR OUR PROGRAM TO CALCULATE THE CAPITAL GAINS AND DEPRECIATION CORRECTLY, WE NEED TO KNOW THE CORRECT VALUE OF YOUR CURRENT BASIS. THIS IS STEP 5 ON THE GENERAL REAL ESTATE SCREEN.
I may be introuble here because I don't have a clear picture of what the program is intended to do.