[(former)FormerSanDiegan]

The #1 legal tax break is write-off of interest of your first mortgage. Of course, getting that requires you to leverage real estate which has been a losing proposition the last few years.

Regarding rental property …
You can use any amount of rental property loss against passive (e.g. rental) income. However, there are limits when applying it towards regular (e.g. wage or investment) income.
Unless you are a real estate professional, the tax loss on rental property is limited to 25K per year taken against ordinary income. Once you make above 100K this amount is reduced $1 for every $2 you make and is thus eliminated at 150K (as waitingforbottom said).
If you make over this amount the tax loss is carried forward (tax loss carryover) until you either count it against rental property income or sell the property and count it against capital gains.

Tax loss on rental property has two components:
1. Actual losses (which are bad because this is negative cash flow).
2. Losses due to depreciation (Generally better since this is a “phantom” loss valued at about 3.6% of the value of your structure each year).

I would not buy rental property for the tax benefits. Buy for cash flow, appreciation or principal pay down (renter pays for your house over time). Consider the tax benefits a bonus. For example, if you make over 150K you can build up a large carryover loss in the early years. As the property seasons and cash flows better in the future (assuming rents increase at some point or the property is paid off) the income stream can be tax-free, because the carried-over tax loss can be counted against rental income *

* Disclaimer – I am not a lawyer or an accountant, but have prepared my own taxes for rental property owned over the past decade.

[(former)FormerSanDiegan]

The #1 legal tax break is write-off of interest of your first mortgage. Of course, getting that requires you to leverage real estate which has been a losing proposition the last few years.

Regarding rental property …
You can use any amount of rental property loss against passive (e.g. rental) income. However, there are limits when applying it towards regular (e.g. wage or investment) income.
Unless you are a real estate professional, the tax loss on rental property is limited to 25K per year taken against ordinary income. Once you make above 100K this amount is reduced $1 for every $2 you make and is thus eliminated at 150K (as waitingforbottom said).
If you make over this amount the tax loss is carried forward (tax loss carryover) until you either count it against rental property income or sell the property and count it against capital gains.

Tax loss on rental property has two components:
1. Actual losses (which are bad because this is negative cash flow).
2. Losses due to depreciation (Generally better since this is a “phantom” loss valued at about 3.6% of the value of your structure each year).

I would not buy rental property for the tax benefits. Buy for cash flow, appreciation or principal pay down (renter pays for your house over time). Consider the tax benefits a bonus. For example, if you make over 150K you can build up a large carryover loss in the early years. As the property seasons and cash flows better in the future (assuming rents increase at some point or the property is paid off) the income stream can be tax-free, because the carried-over tax loss can be counted against rental income *

* Disclaimer – I am not a lawyer or an accountant, but have prepared my own taxes for rental property owned over the past decade.

[(former)FormerSanDiegan]

[quote=DWCAP]Please excuse my misunderstanding of why it is ok for pigg’s to pay bubble prices in 2009 but it isnt ok for other people to have done it in 2004. [/quote]

I am not saying that (former) Bubblesitter bought at any particular price point, but …
Theoretically and practically, there is a HUGE difference in paying a 2004 price in 2004 versus 2009.

[(former)FormerSanDiegan]

[quote=DWCAP]Please excuse my misunderstanding of why it is ok for pigg’s to pay bubble prices in 2009 but it isnt ok for other people to have done it in 2004. [/quote]

I am not saying that (former) Bubblesitter bought at any particular price point, but …
Theoretically and practically, there is a HUGE difference in paying a 2004 price in 2004 versus 2009.

[(former)FormerSanDiegan]

[quote=DWCAP]Please excuse my misunderstanding of why it is ok for pigg’s to pay bubble prices in 2009 but it isnt ok for other people to have done it in 2004. [/quote]

I am not saying that (former) Bubblesitter bought at any particular price point, but …
Theoretically and practically, there is a HUGE difference in paying a 2004 price in 2004 versus 2009.

[(former)FormerSanDiegan]

[quote=DWCAP]Please excuse my misunderstanding of why it is ok for pigg’s to pay bubble prices in 2009 but it isnt ok for other people to have done it in 2004. [/quote]

I am not saying that (former) Bubblesitter bought at any particular price point, but …
Theoretically and practically, there is a HUGE difference in paying a 2004 price in 2004 versus 2009.

[(former)FormerSanDiegan]

[quote=DWCAP]Please excuse my misunderstanding of why it is ok for pigg’s to pay bubble prices in 2009 but it isnt ok for other people to have done it in 2004. [/quote]

I am not saying that (former) Bubblesitter bought at any particular price point, but …
Theoretically and practically, there is a HUGE difference in paying a 2004 price in 2004 versus 2009.

[(former)FormerSanDiegan]

If I were you I would simply continue with your plan A, and move out at the end of April. Particularly since the landlord is not responding.
Of course, I prefer to avoid situations that might turn ugly in general and limiting any potential liabilities, but that’s just me.

Is it true that you have no signed lease agreement at all, only verbal ?
It also appears that the owner is rent-skimming (charging rent and not paying the mortgage). Did they also finance as owner-occupied ?

I would not be comfortable without a written rental agreement (ever, actually), but especially in this case. Do you have any other relationship (friend, relative co-worker, colleague) with the landlord that makes you trust their word ?

Also, if the rental agreement is verbal …
What about security deposits ? What about check-out lists when you move out (in case the place is ransacked after you leave) ?

[(former)FormerSanDiegan]

If I were you I would simply continue with your plan A, and move out at the end of April. Particularly since the landlord is not responding.
Of course, I prefer to avoid situations that might turn ugly in general and limiting any potential liabilities, but that’s just me.

Is it true that you have no signed lease agreement at all, only verbal ?
It also appears that the owner is rent-skimming (charging rent and not paying the mortgage). Did they also finance as owner-occupied ?

I would not be comfortable without a written rental agreement (ever, actually), but especially in this case. Do you have any other relationship (friend, relative co-worker, colleague) with the landlord that makes you trust their word ?

Also, if the rental agreement is verbal …
What about security deposits ? What about check-out lists when you move out (in case the place is ransacked after you leave) ?

[(former)FormerSanDiegan]

If I were you I would simply continue with your plan A, and move out at the end of April. Particularly since the landlord is not responding.
Of course, I prefer to avoid situations that might turn ugly in general and limiting any potential liabilities, but that’s just me.

Is it true that you have no signed lease agreement at all, only verbal ?
It also appears that the owner is rent-skimming (charging rent and not paying the mortgage). Did they also finance as owner-occupied ?

I would not be comfortable without a written rental agreement (ever, actually), but especially in this case. Do you have any other relationship (friend, relative co-worker, colleague) with the landlord that makes you trust their word ?

Also, if the rental agreement is verbal …
What about security deposits ? What about check-out lists when you move out (in case the place is ransacked after you leave) ?

[(former)FormerSanDiegan]

If I were you I would simply continue with your plan A, and move out at the end of April. Particularly since the landlord is not responding.
Of course, I prefer to avoid situations that might turn ugly in general and limiting any potential liabilities, but that’s just me.

Is it true that you have no signed lease agreement at all, only verbal ?
It also appears that the owner is rent-skimming (charging rent and not paying the mortgage). Did they also finance as owner-occupied ?

I would not be comfortable without a written rental agreement (ever, actually), but especially in this case. Do you have any other relationship (friend, relative co-worker, colleague) with the landlord that makes you trust their word ?

Also, if the rental agreement is verbal …
What about security deposits ? What about check-out lists when you move out (in case the place is ransacked after you leave) ?

[(former)FormerSanDiegan]

If I were you I would simply continue with your plan A, and move out at the end of April. Particularly since the landlord is not responding.
Of course, I prefer to avoid situations that might turn ugly in general and limiting any potential liabilities, but that’s just me.

Is it true that you have no signed lease agreement at all, only verbal ?
It also appears that the owner is rent-skimming (charging rent and not paying the mortgage). Did they also finance as owner-occupied ?

I would not be comfortable without a written rental agreement (ever, actually), but especially in this case. Do you have any other relationship (friend, relative co-worker, colleague) with the landlord that makes you trust their word ?

Also, if the rental agreement is verbal …
What about security deposits ? What about check-out lists when you move out (in case the place is ransacked after you leave) ?

[(former)FormerSanDiegan]

You need to change your screen name to Former BubbleSitter.

Congratulations.

[(former)FormerSanDiegan]

You need to change your screen name to Former BubbleSitter.

Congratulations.

[(former)FormerSanDiegan]

You need to change your screen name to Former BubbleSitter.

Congratulations.

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