3 ms·
Hm, but income from rental is also taxed, isn't it? If so, how does it help?
by mciancia 5y ago
Hm, but income from rental is also taxed, isn't it?
If so, how does it help?
- jedberg 5y agoThe income from the rental is taxed, but slowly over decades. You don't have to take that entire tax hit in one year.
- alex_young 5y agoYou can also sell it and take the gains tax free in many cases.
- MR4D 5y agoShort of a 1031 exchange, I'm not sure how you would do that.
- alex_young 5y agoYou can sell a house every 2 years and write off up to $500k in capital gains as long as it’s been your primary residence for 2 of the last 5 years. Doesn’t need to be consecutive.
- MR4D 5y agoSure, but you have to stomach the 6% commission you’re paying to the brokers, which really limits this situation to transitory market conditions instead of a get rich quick strategy.
- notahacker 5y agoAlso, people buying rental property from cash they earned from wages or selling their business pay tax on the wages/gains and the rental income, not just the latter...