What says the brain trust?

He's only showing rental income on line 21... no expenses... nada... the CPA(?) is apparently referring to how a depreciation deduction erodes the basis. The CPA(?) did tell TP that he did get a full deduction for taxes and mortgage int on Sch A...  :-) 

Those bloody CPA's. He is doing his client a disservice, not only on the allowed or allowable that Archie pointed out, but paying tax on income that should be reduced by the expenses  he paid.  

Agree.  In general, we CPAs are a sorry lot.

For the record, I never did give any geographic specifics as to my definition of east.

Rick.... you're not missing anything...FMV, arms length...  this is about as straight forward as it gets... TP pays utilities, repairs, insurance, etc... no deductions no depreciation... only reporting rental income on line 21....  Other than that TP has 60K W2 income from S corp, and 5K Sch E pg 2 from K1... and I really rather not look at the 1120s.

This aint rocket science.... but TP has a lot of confidence in his preparer and you can probably guess what I think of him.  TP is a friend, not a client... and I really don't want him for a client.... but he's leaving a lot of $$ on the table and he needs to hear it from someone else.

Skylane

Based upon the information you gave us I agree with you and your friend definitely needs to find someone else for his tax preparation

Will he allow you to recalculate one of his returns?  That way, you could tell us what you did, we could check it, and you could take it back to him "signed off" by a dozen or so of us.

I think at this point all you can do is point your friend at Pub 527 and let him read for himself from there.

Rick

 Bruce-you can also print out this thread and show it to him.

Debi....,    exactly my intent

 Bruce-you may want to clean it up a little, if you can.  

I'm still working on that map of the east.  You wouldn't happen to know your GPS coordinates would you?

Oops, just checked my coordinates and found out that I'm actually in the West so we're all good. :)

IRMN  - I'd amend to "only a small handful of CPAs out east'... but you may consider using Peter's coordinates as your map reference point.

while you are at it IRMN why not simply get rid of Wisconsin too-put you pretty close to having beach front on Lake Michigan