If the rental property activity shows a net passive loss (after all deductible expenses including depreciation are subtracted from rental income), then that net passive loss is used in the following order:  (1) offset other net passive gains, (2) offset other ordinary income subject to MAGI limitations and active participation rules, and lastly (3) carried forward to the next tax year.The general answer to your question is yes, a net passivle loss from one passive activity is first used to offset passive income from another passive activity.  

Hello and was wondering if someone has input regarding the taping of telephone conversations with investors, banks, buyers and sellers in states within the 12 state requirement, involving consent of all parties to a conversation or does investing fall within the "business telephone" exception rule which generally allows monitoring of calls and taping over an extension phone which is both provided to a subscriber in the ordinary course of a telephone company's business and is being used by that subscriber in the ordinary course of its business?

If not, then that is an extremely good reason to keep all your closing documents and improvement receipts with your folder for each property to properly calculate your basis.Just to add to what John wrote:profit = selling price - BasisBasis = purchase + cost of improvements - depreciation (only on rentals, not on rehabs)rehabs are considered inventory and ordinary trade or business and rentals are considered a capital asset.Repairs are considered an expense in nature for a rental and deductible in year paid for cash basis taxpayers (everyone on here)purchase price is the amount you buy something for and selling price is the amount you sell something for.

From the tax perspective, 1) If you run your PM via LLC, the activity is reported as Page 1 activity of the LLC, an Ordinary Income activity.

Nothing that out of the ordinary about it and it's definitely on the tenant to foot the bill for mistaking a sewer smell for a gas leak.

Income from wholesaling is ordinary income and subject to federal, state, and local income taxes as well as self employment income (i.e., social security plus medicare, both halves, since its self employment income.)Passive losses from rentals can be used to offset ordinary income under limited circumstances:1) If your AGI is under $100K you can take up to $25,000 in passive losses against ordinary income.

Incidental sales could be a ST cap gain, but would still be at ordinary income tax rates.

Actually, I was predicating this on 30% ROI, which is very achievable and is conservative on leveraged buy and hold investments in this area of the country.And this doesn't even consider the hit taken down the road when you pay taxes on at least some portion of your retirement accounts at ordinary income tax rates (accept for a Roth, but I don't think that is what is being contemplated here).I agree that this would be more appropriate for those under 55.However, if you believe tax rates will be materially higher in the future (most sentient humans think this will be true), paying the taxes now at lower rates will offset at least some of the penalty.

A good example would be a garbage can.All expenses must be ordinary and necessary as well.

If you don't currently have a Roth IRA, you will pay ordinary income taxes on the fair market property value upon distribution.