- When you are a landlord, you will undoubtedly have a number of expenses to deal with in relation to your rental properties. While these expenses can add up quickly, you do get a break when it comes to the Internal Revenue Service. The expenses that you have that are related to your rental properties can be deducted from your taxable income. Things like repairs, advertising costs, local travel and insurance can all be deducted from your taxable income.
- One of the primary advantages of owning rental property is that you can depreciate and the asset over a span of 27.5 years. This allows you to take a loss on your taxes for the value of the property that you are losing, even if the property is actually appreciating in value. This could be a substantial deduction depending on the type of property that you have. This creates a way to generate positive cash flow without paying taxes on it.
- One of the benefits of being a landlord is that you get to use other people's money to help you buy a property. As if this was not enough, the government actually allows you to deduct the cost of borrowing that money on your taxes. When it comes to paying mortgage interest for a rental property, you can deduct that amount of money from your taxable income. At the beginning of your loan, this will basically be the majority of your mortgage payment.
- If you have a home office in your primary residence, you can also get a deduction for this when you have rental properties. Owning rental property is a type of business and the IRS allows you to take a deduction for having a home office when you have business income. This home office deduction allows you to deduct a portion of your mortgage payment, your utilities and any other business expenses that you pay for your office.
Property Expenses
Depreciation
Interest
Home Office
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