When your leveraged rental property generates a taxable income, you pay ordinary income taxes on that amount (not the NOI) regardless of your W2 income.  

Therefore, the furnace replacement is a capital improvement to your residential rental property.As with the restoration costs discussed above, these costs are in the same class of property as the residential rental property to which the furnace is attached.Is generally depreciated over a recovery period of 27.5 years using the straight line method of depreciation and a mid-month convention as residential rental property.Note: A taxpayer whose average annual gross receipts is less than or equal to $10,000,000 may elect to not capitalize amounts paid for repairs, maintenance, or improvements of certain eligible building property if the total amounts paid during the taxable year for such activities do not exceed certain dollar limitations.

This is what I found via TurboTax:How the IRS classifies cancelled debtYou might consider it unfair that a debt you successfully cancel or negotiate away comes back to haunt you as taxable income.

A1031 exchange can defer (not avoid) the taxes indefinitely until you sell the replacement property in a taxable sale.

Therein lies the problem resulting in if you refinance it in say 5 years and pull out say 30k of equity you would cause a taxable event.Feel free to PM me if you need a further explanation.

Balance went from $254,000 to $228,000 in 16 months.4) Taxable income is only $15,000/mo give or take..... $2500/mo social security also(68 years old)Anyways if anyone local can help out, this wasn't really something I was planning on doing, but adding the 2nd lot to our home aside from the $600k price adds probably an additional $100k+ in equity just on the basis of a rare double lot in the best part of town.

Eventually I will start taking distributions at which time the gains become taxable as well as the money paid in tax deferred.

By paying off the past-due balance and rehabbing the house with my discretionary (taxable) funds and labor, I have essentially increased the home's value and lowered the remaining mortgage balance.

Hello,I own a commercial mixed-use property and recently had a fire damage part of the building, mainly on the ground floor commercial space. The rest of the building was only slightly damaged and is currently rented....

The amount you convert is included in your taxable income.