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How some landlords pay no taxes on rental income
Landlords use IRS provisions like the Augusta rule, depreciation, and 1031 exchanges to legally reduce or eliminate taxes on rental income and capital gains.
- TurboTenant explains legal strategies landlords and rental property owners use to reduce or eliminate taxes on rental income, noting that whether income is taxable often depends on individual circumstances under IRS rules.
- Under IRS rules, rental property owners face passive-activity limits but may apply up to $25,000 of rental losses against active income, subject to income caps.
- The Augusta rule allows homeowners to rent their residence up to 14 days tax-free, while like-kind exchanges and qualified opportunity funds defer capital gains under IRS rules.
- Sellers should note that excluding up to $250,000 for single filers or $500,000 for married filing jointly applies when they meet the ownership-and-use test for a primary residence sale.
- Landlords should work with tax professionals to tailor strategies, as poor bookkeeping can erode deductions, so maintaining strong accounting and bookkeeping practices is essential.
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23 Articles
23 Articles
How some landlords pay no taxes on rental income | News Channel 3-12
witsarut sakorn // Shutterstock As tax season approaches, you might be asking yourself, “Is rental income taxable?” Or, “Do you pay tax when you sell a rental property?” The short answer is that it depends. Rental income is often taxable, but in some cases, the IRS may not require you to pay taxes on rental income or the sale of a property. But even if your rental income is taxable, there are ways to lower or defer your tax bill. TurboTenant s…
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Total News Sources23
Leaning Left1Leaning Right0Center20Last UpdatedBias Distribution95% Center
Bias Distribution
- 95% of the sources are Center
95% Center
C 95%
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