Commercial Investing regarding taxes

[Matthew Madrigal]

Another question I can’t seem to find anything is. I know in the beginning of a loan you can just write off the interest because that’s all your getting charged but later down the road you pay more down on principle so couldn’t an investor lose money overall say if the principle is over the amount they can depreciate since investors typically use depreciation to offset the principle cost?

[Allen S.]

@Matthew Madrigal while deducting your mortgage interest is handy,  it should not be the only reason your investment works.  I submit to you that if you "need" mortgage interest or depreciation to make an investment function then it isn't an investment after all.  Remember the purpose here is to MAKE money, and when you do that, you owe taxes.  Yes there are ways to mitigate the excessive taxation that exists (through cost segregation, 1031 exchanges, other deductions and writeoffs), but the PURPOSE isn't about looking for write offs.  It is about making a return on your time and money... and sometimes you'll end up paying taxes.  Which is generally a better problem to have than losing all of your money on bad or over leveraged investments and not owing taxes because you are broke.