First year in real estate and not sure which forms to use. I have always done my own taxes and would like to continue. Do I use the schedule D like when I had my flea market business? Thank you.

You might want to consider using a CPA, at least for your first year, until you get a good grasp of not only what forms to use but what is and isn't deductible, what you might want to depreciate over multiple years, etc.

Operating a real estate business is far more complex than a flea market!

I've been using a CPA for 6 years. No way would I take the chance of screwing my business taxes up because in an Scorp it flows over to my personal. You screw up the business, you can bet the personal is wrong too. That would be a whole lotta time and money if you make a mistake and get caught. Going rate here is about $400 for both my personal and business. Better to let the CPA handle it in my opinion.

Joe

I also use a CPA. It is just like our business the rules change all the time. I have seen where having a CPA has paid off. One year there was a mistake made on our corp taxes and when the IRS found the mistake we had some additional taxes to pay. Well along with the additional taxes due there were penalties and interest included, which we all know are much more than having a professional do your taxes. Bottom line the CPA covered the penalties and interest through his insurance policy and we covered the taxes due. Cheap insurance!

Get your taxes done professionally for the firts year. Then you will know exactly what you need to file going forward.

DaddyAdd:

I don't think your answer takes in to account that there are new rules every year. Repeating what was done in a prior year may no longer be acceptable in a future year. The tax code is constantly being changed.

Mr. Foreclosure

Schedule C - Business Income and Schedule SE - Self-Employment Tax. By the way, your flea Market Business should be on Schedule C also.

Form 8829 (?) for home office deduction if applicable. And schedule A for mortgage interest if you own your home and other miscellaneous deductions (not necessarily related to your real estate business).

Well I just looked at the form numbers that my CPA used for mine. Some of them obviously are not part of the real estate business, however in addition to C, SE and 8829 mentioned in the posts above I also see that he used 4562. That had entries in it related to depreciation for items previously place in service for the business and I see that it picks up the vehcle use with a break down of business use vs personal use (Part V, Section B).

Speaking of "The TAX man cometh" might I make a suggestion? Perhaps others do this also but when I get to December I try to prepay some of my deductible expenses (for example Realtor dues and MLS access fees) for the following year and defer some of the income until after the beginning of the next year (Christmas presents bought on plastic can be paid for in January if needed to faciitate the cash flow). It helps with the current year tax obligations while "kick starting" the new year.

This is somewhat off tangent, but I'm reminded that the %^#@*+& GST we have in Canada does, in fact, have one benefit.
Because a return is required every 3 months, the year end Income Tax return figures become readily available by means of a simple addition exercise.
Admittedly, you need to plan each quarterly return so you break expenses into categories that match the Income Tax entries (e.g. Advertising, Auto expenses, Office Supplies, etc), even though the GST return is interested in only the total of GST paid out on all your expenses. However, this is achieved by using a worksheet that includes the GST amount (which, especially in the case of bills paid to US suppliers, can be NIL) for each incurred expense. In turn, you can gather all the bills into a folder for each quarter, which makes them easy to find whenever you need to recall what you paid to whom.
Then, at year end you have the guts of your Income Tax return at hand. All that's needed is adjustments such as bank charges, personal auto expenses (a percentage of the four quarterly totals), and, if it applies, the business portion of home expenses.
Not the least benefit is that you don't have to remember the details of (shall we say?) a lunch chit you picked up when taking a client/prospect out to see half a dozen or so houses several months ago.
I personally hated the extra paperwork when GST came into being. Now, though, I see it as a silver lining to the bureaucratic cloud I imagined it would be.

Duncan