What are the tax benefits for rental properties?

What are the tax benefits for rental properties?

Rental properties can offer several tax benefits, including deductions for mortgage interest, property taxes, and depreciation.

Can you explain how depreciation works for rental properties?

Depreciation allows you to deduct the cost of the property over a set period, typically 27.5 years for residential rentals.

Are there any specific expenses I can deduct?

Yes, you can deduct expenses like repairs, maintenance, property management fees, and even travel expenses related to managing the property.

What about capital gains tax when I sell the property?

When you sell a rental property, you may be subject to capital gains tax on the profit, but there are exemptions and strategies to minimize it.

How can I maximize my tax benefits?

To maximize tax benefits, keep detailed records of all expenses, consider tax strategies like 1031 exchanges, and consult a tax professional.