Taxes on cash flow

[Alex Bernth]

Hello everyone, I hope y’all are doing well. So since rental cash flow/income is taxed by the IRS, would I be able to use my renovations cost as a tax deduction? Therefore it’s seen as a loss similar to if a property depreciates in value each year.

Example: Renovations cost -20k & annual cash flow is +5k

Hopefully I worded this correctly, thanks

-Alex

[Ashish Acharya]

Originally posted by @Andrew Postell:

@Alex Bernth not only can you write off your renovations but you can also write off taxes, insurance, mortgage interest, depreciation, and a whole slew of other items.  I'm working under the assumption that this is a 1-4 unit property that you claim on your Schedule E but even if it's a different property you will have LOTS more deductions besides just the repair work.

 Renovations are not always deductible. There are many treatments depending on if you have already rented a place, if the renovation is repair or an improvement, or depends on the cost of the renovations as well.

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