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You earn 100k as a wage slave. After 30% Tax 70k. (Random numbers). Now you pay for your roof 40k. You have 30k left. (Likely your would take a loan but lets ig

You earn 100k as a wage slave. After 30% Tax 70k. (Random numbers). Now you pay for your roof 40k. You have 30k left. (Likely your would take a loan but lets ignore this now). The bottom line: You pay 30k in taxes and 40k for the roof and have 30k left. Landlord has 100k rental income. To make it simple, he has to pay 30% tax too. But he has now another bisness expense of 40k for the roof, so he gets only 60k income. Not he pays 30% income tax on that, so he has only 42k left. But this is 12k more than you because the roof was a business expense.

seanmcdirmid 6y ago
The landlord doesn’t get to deduct expenses on their own residence. They can deduct expenses on other people’s residences for sure, but one end or the other is taxed at 30%. The landlord isn’t coming out ahead unless they are able to fudge numbers on their taxes in the confusion of their more complicated tax return. They can also deduct 25k in losses over rental revenue from personal income given lots of rules (like you can’t make more than $100k to get the full deduction and it phases out after $150k).