New tax requirement-Beware Landlords and Second Homebuyers in the Brooklyn,Jackson&Irish Hills Mi Area
Owners of rental property will soon face tough new tax reporting requirements and stiff penalties if they dont comply. The federal law that goes into effect Jan. 1 applies equally to landlords of multiple units, investors with a handful of properties and individuals who own a vacation home that they rent out for part of the year.
This is going to create a lot of questions for second homeowners, According to local CPAs, section 2101 of the Small Business Jobs Act of 2010.
For the first time, the Internal Revenue Service is treating rental property as a trade or a business for Form 1099 reporting purposes.Which means you will have to keep records of any service to rental property that amounts to $600 or more per service-provider during the course of the year.
Clients who own rental property "beware" most do so as vacation homes that they rent out to help defray the cost. The federal law applies to any property, within the United States, if it generates rental income. Michigan homeowners are required to report all income, even if coming from out-of-state.
The imminent arrival of section 2101 seems to be a well-kept secret, particularly for owners of vacation homes.
There has been very poor communications for folks with second homes, most Realtors are unaware of this change. Realtors need to inform people who are considering a vacation home. It is not a disclosure item at the moment however it will promise to become a heated subject if overlooked.
But if youve owned your home for years or you dont use a CPA for your taxes, its very unlikely you know about this provision.
Efforts to repeal section 2101 have so far failed. The American Institute of Certified Public Accountants last month sent a letter to members of the U.S. Senate with a repeal request, and an attempt to do so by Senators Democratic and chair of the Senate Finance Committee, was defeated.
The property owner is liable for filing incorrect information or for not filing at all. Under the law, fines for filing incorrect information will double, with a maximum penalty of $100 per 1099 form. Fines for not filing at all will double, to a maximum penalty of $200 per 1099 form.
For More information about Vacation Homes and Rental Properties in the Brooklyn Irish Hills and surrounding areas , Feel free to Contact Lillian Fierro anytime, Experience and knowledge is on your side. 517-944-5060 Direct
Lillian is a Realtor with Re/max Mid Michigan in Brooklyn located at 131 N. Main street Brooklyn MI 49230&has been active in Real Estate for the past 11 years.
Wednesday, December 22, 2010
Wednesday, July 21, 2010
Wednesday, March 31, 2010
Excited I am ! The Lake's have thawed the Sun is shining and the Listings are flowing in for Spring. The Irish Hills are coming alive ! A little early this year I might add . If you are in the market for a vacation home. I advise you to get a head start. The warmer it is out the more the prices tend to peak on lake properties in our area. I cant begin to tell you how good the deals are out there.
A few listings of interest such as these two both located on all Sports Lake Columbia .
128 Claremont a Channel Front home with docks 219,000( house not pictured)
209 Nottingham a Main Lake,Sandy Beach a stunning Lakefront retreat has rental potential of 2-3k a week if you are unable to use it year around because of its frontage ! A must see home .
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