What are the tax benefits of rental property?
Rental property can offer several tax benefits to landlords. Some of the most common tax benefits include:
- Depreciation: Landlords can depreciate the cost of their rental property over a period of 27.5 years. This can provide a significant tax savings.
- Mortgage Interest: Interest paid on a mortgage for a rental property is tax-deductible.
- Operating Expenses: Many expenses associated with owning and operating a rental property, such as repairs and maintenance, property management fees, and insurance, are tax-deductible.
- Capital Gains Exclusion: If a landlord meets certain qualifications, they may be able to exclude a portion of the capital gain from the sale of a rental property from their taxable income.
It is important to note that Tax laws and regulations may vary depending on the country and the state. It’s always best to consult a tax professional for more information on how rental property income and expenses may affect your tax situation.