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Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: electriceagle on April 01, 2020, 11:40:25 PM

Title: Calculating the cost of goods sold for residential rental
Post by: electriceagle on April 01, 2020, 11:40:25 PM

How does one calculate the "cost of goods sold" for residential rental? Is it the cost of operating the property? Does it include mortgage interest and property tax?

I don't understand which items are included. For instance:
- Cleaning
- Advertising
- Legal fees
- Mortgage interest
- Repairs
- Property taxes
- Insurance
- Depreciation

Or is it just "zero" because there is no physical item being sold?

Perhaps someone who understands this better than I do can help.

Title: Re: Calculating the cost of goods sold for residential rental
Post by: MoseyingAlong on April 02, 2020, 12:10:28 AM

Hi,
I highly recommend getting a blank Schedule E and looking it over. Schedule E is the form used for residential rental property. You'll see where most of those expenses are reported.
https://www.irs.gov/forms-pubs/about-schedule-e-form-1040

Cost of goods sold is more a Schedule C business item.

HTH

Title: Re: Calculating the cost of goods sold for residential rental
Post by: electriceagle on April 02, 2020, 02:22:07 AM

Quote from: MoseyingAlong on April 02, 2020, 12:10:28 AM

Hi,
I highly recommend getting a blank Schedule E and looking it over. Schedule E is the form used for residential rental property. You'll see where most of those expenses are reported.
https://www.irs.gov/forms-pubs/about-schedule-e-form-1040

Cost of goods sold is more a Schedule C business item.

HTH

Thanks, but I'm asking for a non-tax reason. I know that people think of cost of goods sold more in schedule C than in schedule E. That's why I'm having trouble figuring it out.

So, I still have the same question.

Does anyone know how to calculate the "cost of goods sold" for residential rental?

Title: Re: Calculating the cost of goods sold for residential rental
Post by: SeattleCPA on April 02, 2020, 02:49:08 PM

Your cost of goods sold (COGS) equals zero.

COGS are the cost of the stuff a store or manufacturer sells. E.g., Starbucks "COGS" are coffee and cups, etc.

Title: Re: Calculating the cost of goods sold for residential rental
Post by: powskier on April 06, 2020, 09:56:29 PM

Are you filling out the SBA disaster loan application?

Title: Re: Calculating the cost of goods sold for residential rental
Post by: gimmi80 on April 07, 2020, 06:48:03 PM

I sent mine in two weeks ago and still have to hear back