Smart planning now can significantly reduce your tax burden — and even open up opportunities to give back to your tenants or community in meaningful, deductible ways.Common Tax Deductions for LandlordsThe IRS allows landlords to deduct most ordinary and necessary expenses related to managing and maintaining rental properties.

We don’t plan to sell anything for a year so we only pay capital gain and not ordinary income tax.  38%??

Plus, the rental income is generally taxed at a lower rate than ordinary income.Also, if the condo appreciates, that’s an added bonus.

The 1245 property (think personal property and bonus depreciation) is recaptured at ordinary tax rates though… so the new property must have an equal amount or more 1245 property. 

👋 Hello BiggerPockets Community!
My name is Jose Rodriguez, and I’m excited to join this incredible network of real estate professionals, investors, and entrepreneurs. I recently began my journey as a Mortgage Loan O...

If you flip or wholetail, your profit is taxed as ordinary income, so you’ll pay higher rates and possibly self-employment tax.If you hold and rent, you’ll get depreciation, interest, and expense deductions that can offset rental income and lower your overall tax bill.

You’d pay ordinary income tax on the full withdrawal plus a 10 percent penalty, which can easily wipe out 25 to 40 percent of what you pull out.

Looking forward to learning and giving back as I grow.  

Many landlords I talk to are tapping into existing equity to purchase new rentals or rehab older ones.
Have you tried refinancing or portfolio loans to scale? What’s been your biggest challenge with accessing capital...

Yes, you could move across the country to a market that may be growing faster.