What is the actual deduction rate for landlords for property tax?

[blueskies2023]

Our primary residence is in NJ. We may buy a florida home and rent it out for a few years.

Is the deduction on property tax, which is high now since we do not live IN the home, a decent amount?

thank you

[mathjak107]

Originally Posted by blueskies2023

Our primary residence is in NJ. We may buy a florida home and rent it out for a few years.

Is the deduction on property tax, which is high now since we do not live IN the home, a decent amount?

thank you

it gets subtracted off the rental income which is taxable income

[blueskies2023]

Originally Posted by mathjak107

it gets subtracted off the rental income which is taxable income

right. But unless i'm doing the math wrong; it seems quite minimal in our case (18% tax bracket).

example;

rental income 20000 per year.

property tax. 5000 per year.

[dontaskwhy]

If there is any doubt, contact a tax specialist/CPA.

[1ondoner]

Rental income goes into schedule C and your rental property tax is an expense. What exactly is your question?

[oregonwoodsmoke]

Ask your accountant. On your federal income taxes, you deduct the entire amount of the property taxes off the income from the rental. I do not know about Florida income tax.

[oregonwoodsmoke]

While you are talking to your accountant ask about taking depreciation on the rental building.

[dontaskwhy]

Originally Posted by oregonwoodsmoke

I do not know about Florida income tax.

Florida doesn't have a state income tax under any circumstance. Property taxes and closing costs are a whole other story.

[dontaskwhy]

Originally Posted by blueskies2023

Is the deduction on property tax, which is high now since we do not live IN the home, a decent amount?

thank you

If you don't live in the home for x years (3, I believe), there is zero homestead exemption (deduction). There is zero deduction if the home is being rented exclusively. Talk to a CPA from Florida about this for details.

For instance, I own a home that I lived in for almost 5 years, but when I moved out of it and rented it out, I lost my property tax (homestead) exemption as of the date that I rented it out.

[WRM20]

Originally Posted by oregonwoodsmoke

While you are talking to your accountant ask about taking depreciation on the rental building.

Taking depreciation on rental property is mandatory, since your basis is reduced by that depreciation when you sell the house, whether you took the deduction or not.