- Joined
- Jan 25, 2012
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- Conservative
On the straight line deprecation, I can tell you what I think is true (it may not be).True. By the way, totally off subject, if you ever feel like explaining regular straight line deprecation on a rental house and how it effects me when I sell it--please feel free. My wife asked me what it was last time we did taxes and I just said, I am not exactly sure but we do it this way every year (as I am filling in info using H&R Block software). I can't wait to sell the house and not have to deal with the taxes and everything else that comes with being a landlord.
But back to the tips, do waiters and waitresses have a minimum percentage they are supposed to claim? Or has that already been discussed?
Say you bought a house for $30,000, and rent it out,
You set up the deprecation for 30 years at $1000 per year.
This is the amount you deduct off of the property income each year.
After 5 years you sell the property for $35,000.
You would pay $10,000 in capital gains tax, because the deprecated purchase price is now $25,000.
Several decades ago, when I was a waiter, they gave a $2/hour tip credit.
So you worked at $2 below minimum wage, with the idea that you would make at least $2.00 per hour in tips.
The minimum wage amount got reported to the IRS.
If you made more than $2/hour, you were supposed to report it, but few did.