Reaping the Tax Benefits From Rental Property

Reaping the Tax Benefits From Rental Property

One benefit of owning rental real estate is the myriad tax breaks. More deductions and tax-related strategies are available for this property than for just about any other type of investment. Not all owners, however, take full advantage of these allowances, either because they don’t know about them or choose to ignore them, perhaps out of fear of an audit.
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Illustration by Nancy Doniger

“A lot of deductions people may overlook,” said Stephen Fishman, a tax lawyer from San Francisco and the author of “Every Landlord’s Tax Deduction Guide” (Nolo, 2006), “and that can really add up.”

There are, of course, the obvious ones like mortgage interest and operating expenses like insurance. But some people may not know that they can also deduct expenses when conducting real estate business at home, or that there are different ways to depreciate the cost of their property even as its value increases.