The only part that Property 1 pays on that loan is the escrow for property tax & insurance for Property 1.Thank you for your insight.You need to look at purchase price to determine cost basis, not how you financed the purchase.

Note - if you live in your property for 2 years out of the last 5, then you don’t pay taxes on the profit. 

You get your tax benefits.

I’ve got 31 units, and have been filing my taxes on all income from the rentals since I started investing 5 years ago.

The tax advantages of buying/holding gas stations are pretty great.Many of the components of gas stations including pumps, tanks, external parking areas, and other equipment are classified as either 5 or 15 year property so you can bonus depreciate a lot of it (minus the land value) and get significant deductions in year 1.With the 2025 bonus depreciation rate at 40%, a $1 million gas station acquisition could still lead to $100K+ in year 1 deductions depending on the specifics of your deal.

Very simply, large corporations pay into the tax base of that local community and that revenue is used to improve the community and make it a more attractive place for people to live.

I recommend that you look at Notice of Defaults, Vacants, Tax Liens or Probate. 

So I do not have a tax filing with the rental income on it yet.

@John BowensAre you loaning from a pre-tax 401K or did you convert to Roth and then loaning from there?

The biggest differences between residential and commercial:  Scalability, financing are very different, property taxes may be different, Insurance is definitely different.