Tax Deductions in General :: Outside the Cube

Finances
Real Estate (72)
Tax Deductions (4)

General :: Outside the Cube :: Finances :: Tax Deductions

Articles:

This list is sorted by recent document popularity (not total page views).
New documents will first appear at the bottom.

Turn fun trips into tax deductions (1729)
An important detail on mortgage interest deduction for landlords (1463)
Are tax cuts unfair to low earners? (1214)
Saving taxes on rental properties (1079)

Featured Article

An important detail on mortgage interest deduction for landlords

Question:

Does it matter how high my mortgages are on each property? Isn't the interest tax-deductible regardless on which property secures the loan?

Answer:

In many cases, it will not matter. However, I ran last year into a situation where I found out, it does matter for me now.

Simplified example:

- earned annual income of $110k
- primary residence, mortgage interest $50k
- 3 rental homes, total mortgage interest $50k
- 3 rental homes, total rent +$50k
- 3 rental homes, depreciation $50k

Taxable income:
+$110k - $50k - $50k + $50k - $50k = $60k

It all gets lumped together, about $60k taxable income.

Now a small change - higher earned income:

- earned annual income of $300k
- primary residence, mortgage interest $50k
- 3 rental homes, total mortgage interest $50k
- 3 rental homes, total rent +$50k
- 3 rental homes, depreciation $50k

Once the AGI is over $150k, you no longer can deduct passive losses (rental interest, rental depreciation) from earned income.

Taxable:

Earned income: $300k - $50k = $250k taxable
Rentals: -$50k + $50k - $50 = -$50k = a loss

You can carry this loss forward and it will help you when you sell those rental properties.

I personally am in that situation. I found out about it in November 2006. I wish I had found out about it in JANUARY 2006.

The solution is to maximize the loan on your primary residence. The following would look better:

- earned annual income of $300k
- primary residence, mortgage interest $100k
- 3 rental homes, total rent +$50k
- 3 rental homes, depreciation $50k

Rent and depreciation still cancel each other out.
But the taxable earned income goes from 250k to 200k.

It was too late to do something about that in November.

Most recent comments

2009-11-07 07:59:25:
by trul5@hotmail.com
in Dating Scams
on Dating scam from Kazan, Russia - Part 1:

And here is one where the birthmark is easy to see

2009-11-07 07:51:42:
by trul5@hotmail.com
in Dating Scams
on Scammer Jane Mabou from Ivory Coast, Africa:

Here is same Elvira as darkhaired. She use a lot of other names as well
I have her mails if any want them to be posted.
Typcal russan scammer. Works with children, loves anmals, help poor and ... read more

2009-11-07 07:43:01:
by venezolano
in Dating Scams
on Dating scammer Anna Ogannisyan:
@magnus

I would like to see the new postings from lopitropi7777@yahoo.com. He is not a bright Boris. Discovered and still around. That is pathetic.

2009-11-07 07:00:49:
by Agent 86
in Male Dating Scammers
on Dating scammer Ken Anderson:
2009-11-01, 15:40:56
anonymous
Hello Adm,, and Maxwell

I can see no reason to remove any part of the original posting here.
Thank You Wanwan for posting the full infor ... read more

2009-11-07 06:33:15:
by Mangus
in Dating Scams
on Dating scammer Anna Ogannisyan:
Ton from Netherlands on stop scammers said there that he had been scammed of Lusine Mazmanyan from Gyumri in Armenia,on same type of sort which I been scammed on of Anna Ogannisyan from Sisian in Arme ... read more

2009-11-07 06:07:15:
by Magnus
in Dating Scams
on Dating scammer Ludmila from Volzhsk, Russia:
look at the thread of anna ogannisyan.see you soon.regards from sweden.

2009-11-07 06:05:25:
by Magnus
in Dating Scams
on Dating scammer Albina Aytakowa:
look at the thread of anna ogannisyan.regards from sweden.see you soon,mine friends.

2009-11-07 06:04:11:
by Magnus
in Dating Scams
on Dating scammer Alyona Podrez from Angarsk, Russia:
look at the thread of anna ogannisyan from sisian in armenia.she is one of the armenian scammers in the internet.the armenian scammergangs is big in the internet.see you soon.regards.

2009-11-07 06:01:54:
by Magnus
in Dating Scams
on Dating scammer Anna Petrovna Sotova:
look at the thread of anna ogannisyan from armenia.regards from stockholm.

2009-11-07 05:59:38:
by Magnus
in Dating Scams
on Dating scammer greenday564@gmail.com from Tomsk, Russia:
look at the thread of anna oganisyan from sisian in armenia.regards from stockholm.


	Search: