Ultra-basic tax example
Hello friends,
As I get closer to buying my first rental unit, I am thinking more about taxes. I know depreciation can be used to offset rental income. I have a few questions about what the government considers income, and what can be deducted from that income.
I think I can deduct things like:
Property taxes
Maintenance fees
Mortgage interest
Depreciation
I am not sure if I can deduct:
Repayment of mortgage principle
I believe rent paid to me is taxable income, and then I deduct the above items from that. Can I deduct the mortgage payments I make? If I am planning to use the profit to buy another unit, do I still have to pay taxes on it?
I think since I am trading that money for an asset that it will be taxed... I just want to make sure.
Thanks everyone.