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Updated over 5 years ago on . Most recent reply
rental income quetsion
Just starting out with real estate investing and I haven't talked to the CPA yet.
Let's say you have a day job that pays well, $200k/year.
If you acquire 2 rental properties
property 1
rental income - expenses - mortgage interest - depreciation = $10000/year
property 2
rental income - expenses -mortgage interest - depreciation = -$15000/year
Does this mean that you end up with $5k deduction against the day job salary?
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- Tax Strategist| National Tax Educator| Accepting New Clients
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So using only "what your job pays" isn't exactly right, it's going to use a modified version of your AGI on your tax return.
In the case above you have 2 rentals who's net income = $0.
If you make $150k AGI
Your rentals make $10k income
Your income is $160k
If you make $150k AGI
Your rentals have a $10k LOSS
your Income is still $150k, and you have a $10k loss carry forward to the next year
