Taxing rental income or rental cashflow

[David Zheng]

Quick Question

Are you taxed on rental income aka the total rent you charge per month or are you taxed on the cashflow after mortgage, interest, insurance, HOA fees, utilities, fixtures, etc. etc. are all paid?

Like if I make $3000 on rent per month, but my total costs are stated above are $3,050, do I take a "loss of $50"?

What happens when I break even?

Thanks!

[Charles Morgan]

Don't forget to deduct depreciation, the taxman does understand that it may take a couple of years to fully rehab a new acquisition to the point where you actually make a profit. If timed right you can be losing money for several years through new acquisitions.