Martin Lawrence To Become A Landlord

Martin Lawrence To Become A LandlordMartin Lawrence, the comedian actor, has decided to try his hand at a new profession: landlord. posted the story Martin Lawrence: Rent My Gaudy Mansion for $200k a Month, and noted that Big Momma's House actor is looking for a tenant for his 13,900 square-foot estate in Beverly Hills, the site of his wedding in 2010.

The tenant will enjoy 7 bedrooms, 9.5 baths, a wine room, home gym and a state-of-the-art movie theater with concession stand. The mansion was built in 1992 and comes with downstairs staff quarters in the event you need a little help with your day to day chores.

Tax Implications For Landlords
Have a second home you are thinking about renting out? Be sure you are aware of the tax implications. The amount of tax and tax deductions can vary based on how your rental property is used. The IRS will want to determine if your property is 1) a mixed use property, 2) a non-taxable rental property, or 3) a "primarily rental use" property.

Non-taxable Rental Property: This means that your property was rented for 14 days or less. No tax will be charged on any of the rent you collect during that time, but also remember you will not be entitled to any deductions. If Martin rents out his mansion for 14 days or less he will not have to pay any tax. However, it sounds like he plans on renting it out by the month so his mansion would fall in one of the next two categories.

Primarily Rental Use Property: This means that Martin's personal use of the mansion for the year would not exceed 14 days or 10% of the rental days. If he rented the house for 60 days, Martin's personal use of the home could not exceed 6 days in order for the property to fall into this tax category.

In this category Marin would have to claim all income from rent, but would be allowed to deduct all ordinary and necessary expenses associated with maintaining the property even if that meant he generated a loss.

Mixed Use Rental Property: The property would fall into this tax category if Martin's personal use of the property exceeded the guidelines set in the Primary Rental Use Property definition.

In this category Martin would still pay tax on all of the income generated from the property, but deductions would be limited to the amount of income. No loss is allowed to be claimed.


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