Depreciation not enough to offset taxes
Hi,
If the yearly depreciation is less than the Income minus all other expenses, do we need to start paying taxes on the left over income?
example :
Net Income : Rent - (mortgage+insurance+tax+expenses) = $7,500 per year
Property Purchase price : 200,000
Depreciation = 200,000 / 27.5 = $7,272 per year
Do I have to pay taxes on the $228?
Does this mean there is too much equity in the property? We did a refi last year.
Thank you,
Azi