Hi all - does anyone use cash-flow after income tax to evaluate the attractiveness of a property? I projected positive cash flow on a prospective property... until I added my expected income taxes, which turn the number red (primarily because principal payment is not deductible).
Curious to see how folks think about this.
Hi Ali, I'm not very familiar with tax benefits of rental. Could you share some reference material on the topic?
Run a search on depreciation. Typically that offsets the income tax. Also, get to understand depreciation recapture when you sell.
Very helpful! thanks Jon
Igor, here is a link to an IRS publication discussing residential rental. As a tax accountant it’s great reading to me, but I’m sure it could be somewhat boring for others.
Consider reading through and you’ll likely come up with plenty of tax questions. Happy reading!!!
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