Will taking full depreciation from new tax law hurt my qualifying
I bought 3 rentals in 2018. With the new tax law I can deduct all rehab costs AND I can deduct the value of things like floor cabinets etc. (about 15-20% of the total purchase price of each unit!) which is a big deduction and takes me from owing 6k to getting a refund.
But, I need to make 100% sure that when the underwriter looks at my return for my future loans that he doesn’t consider my rentals to have negative cash flow (I did show positive cash flow, but after the depreciation deduction you could theoretically argue that they weren’t profitable).
My mortgage broker told me they will not count that write off as if I actually lost money, they understand it’s just a tax benefit and that I actually earned cash flow. My CPA also agrees that most likely I can take the deduction and it won’t come back to bite me.. But I need to know for sure because I plan to buy many more rentals!
Any underwriters on here?? Any CPAs that have dealt with this? Or any other investors that found the answer? What are you all doing?
