Room Tax and Tax refund...want to do vacation home # 2!

[Rebecca Cramer]

Hi everyone! So we just bought our first vacation rental in January and went live on airbnb in March and we are doing so well we think we can use the money we made over the spring and high season this summer for a downpayment for another one this fall! We have to pay room tax in Ocean City, Maryland where our beach house is located every month. State and federal tax is not taken out automatically so we will have to pay that at the end of the year. So here is my question, if our cost, loss and depreciation is more than our profit, will we not have to pay state, federal tax and will we get a tax return of what we have paid for our room tax. By the end of the year will will have paid out $5,000-$7,000 in room tax. I want to know if I am going to get that back. Im trying to figure out how much we will have to put down on our next house and getting that room tax back would help a TON! Thanks everyone!