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Updated about 8 years ago on . Most recent reply
Confused on income Tax for Potential rental property
Let's say I live in California and make $255,000 of taxable income, from my advertising company. I want to buy a duplex with all cash that would start paying me $2,000 a month after all expenses have been paid (other than tax on the rental income). Raising my personal income above 263k adding another 1% to my personal state income tax. That would mean renting that property would put an extra $8382 burden on me and only be paying out $15,618 per year. If I moved myself and my non Real Estate business to a state like Nevada with no income tax and still bought the Duplex in CA. Would I pay state income tax on just the $24k made from the duplex, at a rate of 4%? Would I pay any rental income tax if the duplex was owned by a Nevada corporation and I lived in Nevada? Any tips or solutions on what to do in this situation. It hardly seems worth a $300k investment along with all the time and energy to make $15k. But maybe I'm missing a major point here.
Thanks ahead of time to anyone who offers any advice. And I will speak to my CPA before actually making any decisions of course.