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Old 10-09-2011, 07:19 AM
 
Location: Bar Harbor, ME
1,922 posts, read 3,425,161 times
Reputation: 1269

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We have renters in our retirement house who almost always paid late, but paid the late fee.

We retired and sold our other house that we live in and told the renters on September 9 they would have to leave. They are renters "at will" now since they failed to return the new lease agreement when the old one expired on September 1. When they showed no signs of moving and implied that they would stay as long as they wanted, we instituted the eviction procedures. Of course, once they received the vacate order by Nov 1, delievered by the sheriff on September 20, they stopped paying anything. Its now Oct 9, and we have to be out of our house that we sold by October 26, but our renters are refusing to leave. The last rental payment we received was on August 20, for the August 1 rent. We need their rent to pay our mortgage and taxes, so we are having to eat these payments with no income for it.

As of October 26, we will be homeless living with friends, with all our furniture in storage, while the renters refuse to leave the house that we are paying taxes on.

On November 2, if the renters are not out, our lawyer will be in court to have them removed. Within 5 days after that, the Sheriff will be knocking on their door with an eviction order to be served in 48 hours. If they are not out in 48, then the Sheriff will remove all their furniture to storage, and they will have to pay a fee to get it out, along with the monthly rental fee for it, and they will be tossed out of the house.

Its not as if these people are destitute. The husband has an assistant manager's job, and another evening PT job.

Its going to probalby cost us another $2000 to go through the eviction process, let alone the expense of storing our furniture, and moving it to the storage unit, and heaven knows what damage they may do to the house in the mean time. The renters deposit will cover only a minore percentage of this any of this, let alone any damage.

So...... How much of all of this will I be able to deduct from my income tax next year?
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Old 10-09-2011, 07:27 AM
 
3,579 posts, read 9,421,646 times
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Quote:
Originally Posted by Zarathu View Post
We have renters in our retirement house who almost always paid late, but paid the late fee.

We retired and sold our other house that we live in and told the renters on September 9 they would have to leave. They are renters "at will" now since they failed to return the new lease agreement when the old one expired on September 1. When they showed no signs of moving and implied that they would stay as long as they wanted, we instituted the eviction procedures. Of course, once they received the vacate order by Nov 1, delievered by the sheriff on September 20, they stopped paying anything. Its now Oct 9, and we have to be out of our house that we sold by October 26, but our renters are refusing to leave. The last rental payment we received was on August 20, for the August 1 rent. We need their rent to pay our mortgage and taxes, so we are having to eat these payments with no income for it.

As of October 26, we will be homeless living with friends, with all our furniture in storage, while the renters refuse to leave the house that we are paying taxes on.

On November 2, if the renters are not out, our lawyer will be in court to have them removed. Within 5 days after that, the Sheriff will be knocking on their door with an eviction order to be served in 48 hours. If they are not out in 48, then the Sheriff will remove all their furniture to storage, and they will have to pay a fee to get it out, along with the monthly rental fee for it, and they will be tossed out of the house.

Its not as if these people are destitute. The husband has an assistant manager's job, and another evening PT job.

Its going to probalby cost us another $2000 to go through the eviction process, let alone the expense of storing our furniture, and moving it to the storage unit, and heaven knows what damage they may do to the house in the mean time. The renters deposit will cover only a minore percentage of this any of this, let alone any damage.

So...... How much of all of this will I be able to deduct from my income tax next year?
For a line item accounting of what will be allowable and what is not, you will need to meet with a good tax accountant for verification. There are certain rules on documentation that are needed on certain things that make them eligiable....but yes a lot of your expense dealing with the eviction should be deductable on your federal taxes.
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Old 10-09-2011, 07:49 AM
 
Location: The Triad (NC)
23,454 posts, read 49,952,681 times
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Quote:
Originally Posted by Zarathu View Post

So...... How much of all of this will I be able to deduct from my income tax next year?
From what I can see...
the attorneys fee to clean up the mess is about it.
(and that's only if you've been declaring the rental income all this time)
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Old 10-09-2011, 08:01 AM
 
Location: Bar Harbor, ME
1,922 posts, read 3,425,161 times
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Quote:
Originally Posted by MrRational View Post
From what I can see...
the attorneys fee to clean up the mess is about it.
(and that's only if you've been declaring the rental income all this time)
Well that would be good. And yes we've been depreciating the house and declaring rental income and the whole ball of wax. So we'll get the normal depreciation amounts, and the expenses we've paid, and the agent fees, in addition to the expenses of eviction with the attorney whouc could be as much as $2000.

It will help with the fact that I'm retired now, and making less than I was when I was working.

Thanks.
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Old 10-09-2011, 08:06 AM
 
11,304 posts, read 13,465,564 times
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you deduct the difference between RENT RECEIVED and EXPENSES PAID. Plus deal with depreciation part as well. Because you will convert the home from a rental to your residence before 12/31, you will have to recapture all depreciation from all prior years, I am pretty sure. Also part of expenses are the fix up, attorney and eviction costs, taxes, mortgage, maintenance and repair, etc.

You might look into getting a POD for storing your furniture. This way you load it onto the POD and the POD is taken to the POD storage warehouse and is left unopened, so you do not have to remove the furniture once it is loaded into the POD. Once your home is ready for you, the POD gets delivered to your new home and you unload it.

FYI...doesn't sound like fun living with friends. I would get a hotel for a short time versus doing that. I just like my personal space and do not like to impose on friends.
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Old 10-09-2011, 08:12 AM
 
Location: Catonsville, MD
2,358 posts, read 5,078,785 times
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I have no advice, only sympathy. We are in the process of evicting a non-paying tenant as well. One who always paid us, then just stopped paying 6 months ago. Since she always paid us in the past (a fairly long-term tenant,) we gave her the benefit of the doubt, even when she paid several months late. I don't know how the laws differ there, but once the sheriff comes on the 17th, she is out of there. We do not have your same situation with needing to move in. It makes you wonder how people could possible have the gall to do such a horrible thing. We will be taking our tenant to small claims court to put a judgement against her so that someday maybe we will recoup our losses. If the stock market weren't so awful right now, we would sell that house. i HATE being a landlord.

I certainly hope your situation straightens itself out quickly and that you can deduct all of this mess from your taxes. Good luck!
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Old 10-09-2011, 09:51 AM
 
Location: Bar Harbor, ME
1,922 posts, read 3,425,161 times
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Quote:
Originally Posted by sware2cod View Post
you deduct the difference between RENT RECEIVED and EXPENSES PAID. Plus deal with depreciation part as well. Because you will convert the home from a rental to your residence before 12/31, you will have to recapture all depreciation from all prior years, I am pretty sure. Also part of expenses are the fix up, attorney and eviction costs, taxes, mortgage, maintenance and repair, etc.

You might look into getting a POD for storing your furniture. This way you load it onto the POD and the POD is taken to the POD storage warehouse and is left unopened, so you do not have to remove the furniture once it is loaded into the POD. Once your home is ready for you, the POD gets delivered to your new home and you unload it.

FYI...doesn't sound like fun living with friends. I would get a hotel for a short time versus doing that. I just like my personal space and do not like to impose on friends.
Our rental house which is our retirement house is 650 miles away from where we live now for another 16 days. We have a total of 25,000 lb of furniture so a POD is not effective especially since we will have to move it up when this is over. So we will need to rent another storage unit where the stuff we had to take out of the house(so it would look empty to potential buyers) is stored. I cannot afford to live in a hotel with a wife, a dog and two cats for a month, so its only friends who have graciously volunteered.

Its not going to be nice. The only good thing is that trashing the place won't really affect us since we expected to do about $10K of materials for renovation anyhow. We can do all the work ourselves, since I am a virtual contractor. But the later we have to wait to make the Moving Company move, the more difficult the move can be since the place is on the coast but about 2 hours from the Canadian border.
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Old 10-09-2011, 10:24 AM
 
3,710 posts, read 4,072,661 times
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Quote:
Originally Posted by Zarathu View Post
Our rental house which is our retirement house is 650 miles away from where we live now for another 16 days. We have a total of 25,000 lb of furniture so a POD is not effective especially since we will have to move it up when this is over. So we will need to rent another storage unit where the stuff we had to take out of the house(so it would look empty to potential buyers) is stored. I cannot afford to live in a hotel with a wife, a dog and two cats for a month, so its only friends who have graciously volunteered.

Its not going to be nice. The only good thing is that trashing the place won't really affect us since we expected to do about $10K of materials for renovation anyhow. We can do all the work ourselves, since I am a virtual contractor. But the later we have to wait to make the Moving Company move, the more difficult the move can be since the place is on the coast but about 2 hours from the Canadian border.
Can you put a trailer on the property and live in it until they move out? That way you can keep an eye on them.
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Old 10-09-2011, 10:45 AM
 
Location: Bar Harbor, ME
1,922 posts, read 3,425,161 times
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Quote:
Originally Posted by trishguard View Post
Can you put a trailer on the property and live in it until they move out? That way you can keep an eye on them.
That's illegal.
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Old 10-09-2011, 11:46 AM
 
11,304 posts, read 13,465,564 times
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FYI..The depreciation recapture might wipe out all your tax advantages for the year...as you have to recapture all the depreciation deductions that you took all prior years.
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