How does depreciation reduce rental taxes?

Residential property depreciates over 27.5 years. A $300k building yields $10,909/year depreciation deduction, reducing taxable rental income by that amount annually.

Can rental losses offset W-2 income?

Only if you're an active participant (up to $25k at income below $100k, phased out to $150k) or a real estate professional. Otherwise losses are passive and suspended.

What is the 3.8% net investment income tax?

High-income investors (over $200k single, $250k married) pay 3.8% NIIT on net rental income in addition to regular income taxes.

Cash Flow After Tax Rental Income Calculator

Calculate after-tax cash flow from rental property: taxable income reduced by depreciation, mortgage interest, operating expenses, and passive loss deductions.

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Frequently Asked Questions

How does depreciation reduce rental taxes?

Can rental losses offset W-2 income?

What is the 3.8% net investment income tax?