Dear Claire: What is Tax Deductible on an Investment Property?

Navigating Investment Property Tax Write-Offs: What You Need to Know for Tax Season

On Dear Claire today we’ll be talking about investment property since it’s tax season. I want to give you an update on what you would write off if you had an investment property.

You could have a rental as you moved out of your home, and you decide to now rent it – becoming an investment property. That way you don’t have to buy it originally as an investment property. Or you could buy an investment property with 25% down and go that route.

If anybody out there owns their own business then you understand what you write off and pretty much an investment property is exactly like that. It’s as if you have your own small business. Say I own rental property at 123 Main St. All of the expenses that I have in order to maintain that rental are tax-deductible. For instance; lawn maintenance, replacing the hot water heater, the interest on your loan (most of the time), the property taxes, the cost of a CPA helping you manage the property, etc. are all tax-deductible. Then you also get depreciation on the property. So a lot of times people are actually going to show a loss on their business their business investment property, even though it’s actually appreciating and, in theory, making money.

This is why people have investment property because it can be a tax shelter and still be appreciating and making money. This stuff can get super complex and convoluted, so if you have any questions, please reach out because I can explain all of this in more detail.

Please check out our YouTube channel and contact me with any questions.

Take care.

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