This cost is factored in and deducted from potential profit.In accounting lingo, I treat myself as a cost driver and show up right there in the COGS at the end of the year.

If you plan to hold the property long term it makes no difference as you will deduct it now or later.NOTE:If you will be holding it a short time(couple of years) and then selling, you will want to keep as high of a basis as possible to avoid paying on the gain, then you will not want to do this.

Wanted to see what your thoughts are to how we do our rentals.We have an investor - pays cash for everything.He gets 12% roi and we get $100 per month for rent per property.So here's how it works$50k for house and all repairs$600 per month for rent Investor gets $500 we get $100 per month If we have expenses then we both get deducted on our return.My husband is the general contractor so he gets paid for remodels, etc.At the end of the year we all get our $ and we can either take it or own more of the company by investing our profits back to company.

The benefit to me would be that I would get a massive mortgage interest deduction.

If you get a big hail storm that shreds that new roof, how badly is paying that $2,500 deductible going to hurt your cash flow?

Silly question but I just cannot remember the answer:Regarding this passive loss allowance that gets phased out @ 150k of w-2 income If for ease of example I make 150k of W-2 income but I contribute 15k to my company 401k does this give me the AGI income of 135k which would qualify me for a small passive loss deduction in said tax year, OR is it based on your income before any of these types ofo deductions?

From a tax deduction standpoint, I believe that mortgage interest on a taxpayer's residence phases out after a certain income level is reached.

Yes, it is a deductible expense like any other operating expense.

All you need is one or two buyers on your list to sell such a great spread, in fact, you don't have to sell it at all, it sells itself.True "cents on the dollar" are calculated by identifying the true, reasonable, and accurate after repair value, and deducting the true and accurate rehab costs to bring the subject property to that ARV.If the purchase price was plus rehab costs were actually 41% of the exit value, you would have 100 buyers waiting in line to bid up the price!

They can deduct the interest and you have to claim it as income.