During this COVID-19 pandemic, landlords have two big possible problems:
Tenants who can’t pay the rent.
Tax losses that they can’t deduct.
We’ll start with the tenants and then move on to the rental property tax-loss issues.
For the first time in U.S. history, residential landlords are subject to a sweeping nationwide federal moratorium on evictions for non-payment of rent through the end of 2020.
With expanded unemployment benefits expiring and limited government rent assistance available to struggling tenants, it’s likely that millions of tenants will be unable to pay all or part of their rent in the coming months.
There is no moratorium on landlords’ responsibility to pay their bills. Thus, landlords need to prepare for some of the rockiest times in decades.
The Federal Moratorium on Residential Evictions
The Centers for Disease Control and Prevention (CDC) and the Department of Health and Human Services issued the latest federal moratorium on evictions. It is an emergency health measure intended to help prevent the spread of COVID-19.
The CDC order is effective September 4, 2020, through December 31, 2020. The order replaces an eviction moratorium put in place on March 27, 2020, by the CARES Act that expired July 24, 2020.
The CDC order generally bars residential landlords from evicting tenants for non-payment of rent if a tenant’s estimated 2020 income is no more than $99,000 (single) or $198,000 (married, filing jointly).
Unlike the CARES Act moratorium, which applied only to multi-family rental properties with rental subsidies or federally backed mortgages, the CDC order applies to all types of residential rentals: houses, duplexes, apartment buildings, mobile homes, and mobile home spaces. There is no requirement that the rental be federally financed or rent subsidized.
The CDC order does not apply ... Log in to view full article.