Hi my name is Esther. My husband and I are looking into real estate investing and plan on investing within the next 6 months. We plan on investing in duplex/triplex/quadplex homes. Our combine income is > 200k. I’m concern how we will be taxed when we start making income on rental properties. I’m planning on buying the properties in Florida. I’m not trying to avoid Uncle Sam but I want to make sure I’m not taxed heavily. I’m not sure how to go about it. Any advice is appreciated.
Welcome to BP...
You should speak with a tax professional. Everytone's situation is a little different.
When you have rental income, it's taxed as passive income. it allows you to itemize depreciation and expenses related to running the rental (maintenance, HOA and property management fees). However, with the new cap of $10,000 in property taxes, you have to really look at the numbers.
Owning rental income is still one of the last places to see tax benefits because of the depreciation. But, you still need to look at the big picture.