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Updated almost 3 years ago on . Most recent reply

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Creative Real Estate Financing

Lines of credit and taxes

Nate Moross
Posted

If I use lines of credit for a down payment on a apartment complex do I have to pay taxes on my cashflow before I pay back the lines of credit or after?

Davenport, Iowa
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Basit Siddiqi
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Basit Siddiqi
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Cash-flow is not reported on your tax return.
Taxable rental income is.

Taxable rental income normally equals Cash flow + principal paydown - depreciation.

Interest expense on a line of credit used as a down-payment may potentially be an additional expense for you, speak with your CPA.

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