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| *Loan,banking and credit>>>tax calculation |
What are the calculations to show the tax benefit of mortage interest deductions for a rental-property buyer? |
I understand that if the owner lives in a four family house, 25% of the interest is shown as a deduction on Schedule A and 75% is shown as an expense on Schedule E. However, exactly how does this benefit the owner? Lets assume the owner paid $500 over the course of the year in taxes and paid $100 in mortgage insurance. Thanks!! You are correct in the first part of your question. The calculation cannot be made without a lot more information. The interest you pay on the rentals plus any other expenses including taxes, maintenance, depreciation, utilities etc, etc is used to offset the rents. The rents would show as income and the expenses zero out the income and probably show a loss. Source(s): Real estate broker 27 years and prof tax prep for seven |
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