Emergency Plan for Mom & Pop Landlords | USTaxAid

Diane Kennedy's Blog

Emergency Plan for Mom & Pop Landlords

Written by Diane Kennedy, CPA on September 4, 2020


The CDC (Center for Disease Control and Prevention) issued a surprise order this week to create an eviction stay through the end of the year. This covers all residential properties, from single family homes to apartment buildings. 

If a state has a more restrictive eviction stay in place, then it will take precedence. This is just a baseline for eviction stay.

What Does the CDC Ruling Mean For Mom & Pop Landlords? 

Over 40% of rental units in the US are owned by Mom & Pop landlords, defined as an owner with 10 or less rental units. If you’re a Mom & Pop landlord, you basically have been told that you can’t do anything about a non-paying tenant with this new CDC order.  

It doesn’t mean carte blanche and anything goes for your tenant, though. First of all, they have to comply. Here is a bullet list of what needs to happen:  


  • Your tenant must make AGI of less than $99,000 (single) or $198,000 (married filing jointly),  
  • Your tenant must have applied for government assistance, 
  • Your tenant must have suffered income loss or medical expense increases due to COVID 19,  
  • Your tenant must show they have tried to pay some of the monthly rent,  
  • Your tenant must state that if they are evicted, they would be homeless or have to go to an unsafe, crowded facility, and 
  • Your tenant must file a form with you, the landlord. A copy of that form is at DECLARATION FORM.    https://www.cdc.gov/coronavirus/2019-ncov/downloads/declaration-form.pdf 

Your tenant cannot: 

 Damage your property or pose a threat to the health or safety of neighbors,  

Pay nothing, 

Not follow any of the rules above, and 

Not file the form with you and still expect to have the CDC eviction stay cover them.  

Next Steps for Mom & Pop Landlords 


If your tenants aren’t paying, or aren’t paying enough, talk to your mortgage lender. If you go for a mortgage forbearance program, make sure you understand the terms. When do you have to pay the missed payments back? Do they agree to not report to the credit reporting agency? 
Many local governments are also allowing for property tax forbearance. Check what’s available in your area. 
If your tenant gets an eviction stay, keep an eye on your property. There have been cases of other people moving in who are not on the lease. That is not allowed. 
It’s also not allowed for your tenant to strip out the property and sell your personal property such as stove, refrigerator, cabinetry or HVAC systems. They can be evicted for that. 

Take advantage of the real estate professional loophole so that you can take deductions on your losses.  

The #1 Tax Break in 2020 is to become a Real Estate Professional 

If you or your spouse (if married filing jointly) is a real estate professional, you can take a full deduction of real estate losses against your other income. That means a whole lot less tax. 
If you’re not yet a real estate professional, you can take a real estate loss up to $25,000 if your AGI (adjusted gross income) is under $100,000. If you’re income is over $150,000, you don’t get any deduction for your real estate loss. The amount of allowable loss is phased out if your income is $100,000 – $150,000.  

The following is from “Safely Take the Real Estate Professional Loophole”, https://www.ustaxaid.com/shop/the-real-estate-professional-status/ 

There are three tests you (or your spouse) need to pass to qualify as a Real Estate Professional: 

#1: You must have spent 750 hours a year on real estate activity and spent more hours on real estate activities than in any other trade or business,  

#2: You must materially participate in the property, and 

#3: Each property must individually qualify for material participation.  

The definition may seem pretty straightforward, but the way it’s applied is anything but simple. We’ll cover more definitions and strategies to apply them throughout the rest of the home study course. 

Some of the questions you may have after reading this are:  

What’s a real estate activity?  

What defines material participation?  

How do you prove the hours for your real estate activity?  

How do you prove more than any other trade or business?  

What happens if you can’t individually qualify each property?  

The right answer makes the difference between qualifying for a tax deduction and not having a tax deduction.  

It’s never been more important to take your real estate deductions than right now. That’s because many owners are going to have losses, maybe for the first time ever.  

Make sure you get all that’s coming to you! Learn how to take advantage of the real estate loopholes with the Real Estate Professional Tax Loophole Home Study Course 


Is Real Estate Still a Good Investment? 

For years, I’ve suggested that the way to wealth and cash flow was to build a business and invest the proceeds in real estate. 
Depending on where you are, and your strategy, that may no longer be the best strategy. There is money to be made right now, but it also means that you’re going to have to be an even sharper investor and operator.
It’s never been more important to know the fundamentals of real estate investing.  

What is your strategy? Stay with what you have or sell off? Would you invest in real estate rentals in your area?  

We’re moving into an economic storm. The feds are taking steps we’ve never seen before. It may work. It may not. The one thing we know is that change is coming.  

Step up your education in running real estate rentals, real estate businesses, bricks and mortar businesses and online businesses, by joining the weekly coaching class. 
Every Wednesday at 5 pm Pacific (1st – 4th Wednesday of the month). Start Here

And don’t forget, the Real Estate Professional Loophole means more money come tax time. 


  1. Alfredo Cruz says:

    Thank you for explaining the details on what are the responsibilities of the tenants. I was wondering about it, because you don’t see it anywhere.

  2. Gerald D Gaddy says:

    I think real estate investing is still a good investment for renting out properties. I am shifting my real estate strategies to renting out to section 8 tenants because the majority of the payments are guaranteed by the government- at least for now. I own only one rental property. My main goal is to pay off this property before moving on to purchase additional homes so I can have additional leverage. I am glad I did not purchase a lot of buy and hold rentals several years ago due to the pandemic.

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