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Posted by ~^ beancounter ~^ on February 26, 2008, 5:04 pm
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what's the deal w/passive and active participation? how does
that work?
> The reason why rental property is considered such a good tax shelter
> is because you can report a loss even though you are making a profit.
> This is possible through depreciation.
>
> Say you collect $12k rent and paid $8k in expenses - you would have to
> claim $4k in rental income on top of your regular income... but after
> a $6k depreciation deduction (typical for property worth $165k), you
> can claim a $2k loss while still making a $4k profit.
>
> Many times there are other factors you need to take into account, like
> depreciation recapture and passive activity limits.
>
> To learn more about Depreciation and how it affects your properties,
> there is a detailed explanation at RealTaxtips.com (http://www.realtaxtips=
.com
> ) You can keep more money in your pockets by taking full advantage of
> your depreciation deduction.
>
> Niman Singh
> Community Relations Director
> TReXGlobal.com (http://www.trexglobal.com)
> Simple Web Tools for Real Estate Investors
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