Cincinnati Ohio Form 1120-REIT 2024-2025

Cincinnati Ohio Form 1120-REIT: What You Should Know

State statutes permit individuals to deduct as a business expense their income from a rental of real property. The city code does not require that the expenses be incurred for the rental of real property, but rather allows the taxpayer to deduct either income or expenses of a rental business in order to avoid the double taxation of income and business expenses. The answer to the question is a clear yes for Rev. Code § 703.06. In the present case, the rental of the property consisted of two separate periods: The first in which the taxpayer rented the property; and the second, where the taxpayer invested the profits from the rental in money market instruments. Therefore, the rental income of the property has been depreciated, and the portion of the expenses for the investments must be paid as an expense. The City Code requires that the expenses must be paid for the rental of real property that is subject to taxation. Therefore, the expenses are paid from the proceeds of the investment, and are capitalized in their entirety. There is no need to account for such expenditures as business expenses, since the taxpayer is not claiming the same deductions that it would if no part of the expenses were for real property. The tax benefits are simply not significant because the deductions paid, regardless of the form, are all paid from the original investment, rather than expenses incurred for the real property that is now in use. A comparison would help to determine whether the taxpayer has, in fact, established “income” on the basis that the income is earned, rather than from an investment for use during a period of occupancy. The court notes that the amount derived by the taxpayer under the present circumstances is not substantial. The taxpayer, therefore, is not entitled to the deduction allowed by the city code, even though the rental income has been “earned” by the taxpayer and is subject to tax under the income tax laws.

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