Instantly calculate cash-on-cash return, cap rate, annual cash flow, depreciation tax savings, and your true after-tax return. Know your numbers before you invest.
Legal deductions every rental property owner should know. Consult Coach Iti (CPA) to maximize your savings.
The IRS lets you depreciate the building (not land) over 27.5 years. On a $350K property with 80% building value, that's ~$10,182/yr in paper deductions — reducing taxable income even when cash-flow positive. This is the #1 tax advantage of real estate.
Qualifying assets (appliances, certain improvements) may be eligible for 100% bonus depreciation in year one. Combined with a cost segregation study, this can create massive first-year deductions and shelter significant rental income — even offsetting W-2 income for REPs.
Reclassify building components into 5, 7, or 15-year depreciation schedules instead of 27.5 years. A cost seg study on a $350K property can unlock $30K–$80K in first-year deductions. Especially powerful when combined with bonus depreciation.
100% of ordinary & necessary repair costs deductible in the year incurred — plumbing, painting, appliance fixes, landscaping. Capital improvements must be depreciated over time. The "routine maintenance safe harbor" lets you deduct recurring maintenance immediately.
All mortgage interest on rental property is fully deductible — no $750K cap that limits personal home deductions. On a $280K loan at 7%, that's ~$19,600 in year-one interest deductions. Points paid at origination may also be deductible.
Fully deductible for rental property — no SALT $10K cap that applies to personal homes. Includes property taxes, landlord liability insurance, umbrella policies, and flood/earthquake insurance relevant to the rental.
Miles driven to your rental property, to collect rent, or to meet contractors are deductible. IRS standard mileage rate: 67¢/mile (2024). Out-of-town travel for your rental may qualify too. Keep a mileage log — it's an audit essential.
Property management fees (8–12%), CPA fees, attorney fees, real estate coaching, and consulting fees directly related to your rental are fully deductible. Even your Agileblast consultation fee qualifies under IRS rules.
Sell a rental and defer ALL capital gains taxes indefinitely by rolling proceeds into a like-kind property within 180 days. Exchange repeatedly until you pass properties to heirs — who inherit a stepped-up basis, potentially eliminating gains forever.
Rental losses are generally passive and offset only passive income — UNLESS your AGI < $100K ($25K exception) or you qualify as a Real Estate Professional (750+ hrs/year, majority of working time). REP status allows unlimited deductions against ordinary income.
If your rental activity rises to the level of a trade or business, you may deduct up to 20% of net rental income under the QBI deduction — reducing your effective tax rate significantly. A safe harbor election (250+ hrs/year) helps establish this status.
If average guest stay is 7 days or fewer, the rental is treated as a business (not passive) — allowing losses to offset ordinary income without REP status, regardless of AGI. This is one of the most powerful Airbnb tax strategies available today.