this post was submitted on 24 Aug 2023
741 points (88.5% liked)

Personal Finance

3747 readers
12 users here now

Learn about budgeting, saving, getting out of debt, credit, investing, and retirement planning. Join our community, read the PF Wiki, and get on top of your finances!

Note: This community is not region centric, so if you are posting anything specific to a certain region, kindly specify that in the title (something like [USA], [EU], [AUS] etc.)

founded 1 year ago
MODERATORS
[email protected]
nieceandtows
[email protected]
741
Landlords should have to pay income tax on their rental properties regardless of whether they're rented out or not. (gothamist.com)
submitted 1 year ago by [email protected] to c/[email protected]
414 comments fedilink hide all child comments
 

cross-posted from: https://lemmy.crimedad.work/post/12162

Why? Because apparently they need some more incentive to keep units occupied. Also, even though a property might be vacant, there's still imputed rental income there. Its owner is just receiving it in the form of enjoying the unit for himself instead of receiving an actual rent check from a tenant. That imputed rent ought to be taxed like any other income.

you are viewing a single comment's thread
view the rest of the comments
[–] [email protected] 4 points 1 year ago* (last edited 1 year ago)

More than that. You can depreciate the building (but not the land) to offset tax on the income but the bill eventually comes due because by depreciating it you're lowering your cost basis. For example you buy a property for $150k. If you depreciate it long enough it's worth $0. If you then sell it for $350k you have to pay tax on all $350k, not just the $200k gain in value.

However If you intend to use the proceeds from that sale to buy another investment property or properties you can do a 1031 exchange to roll your adjusted basis into the new property. Thus even when you sell it you don't have to pay the tax.

As you might, expect tax laws are written to benefit constituencies that politicians value highly. Wealthy donors are among those constituencies.