cash flow tax free?

[Account Closed]

i have a simple question about cash flow from rental properties and taxes. is cash flow considered income? Will i have to claim my cash flow as income and be taxed on it? 'm just a little confused about this.

[Jean Bolger]

It's not taxed the same as your income from a job. Rental income is reported on Schedule E on your taxes. Yes, you will be taxed, but only after deductions which include your mortgage interest (assuming you have financing) and depreciation. The depreciation deduction will reduce the amount you end up paying on the money you get from a rental. But you may have to pay back some of those savings when you sell the property.

This isn't the whole story, of course- it complicated, and I am not a tax expert! But I hope it helps with your question.