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Richard, Tax Attorney
Category: Tax
Satisfied Customers: 45689
Experience:  29 years of experience as a tax, real estate, and business attorney.
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Hi, My wife has a small furnished rental business. She

Resolved Question:

Hi,

My wife has a small furnished rental business. She has a number of properties for which she is making mortgage payments. She tells me the principal portion of the payments are taxable. I find this hard to believe. The principal payments are like payments into a savings account. The only thing taxable would be capital gains realized upon sale.

Am I right that principal payments are NOT taxable even for a small business?

Thanks,

Bob
Submitted: 3 years ago.
Category: Tax
Expert:  Richard replied 3 years ago.
Are you asking if the principal payments are taxable or tax deductible?
Customer: replied 3 years ago.

Thanks for the reply. I am asking if the principal payemts are taxable for a small business. I know the interest payments are tax deductable. But to tax principal paymets seems ridiculous. Yet this is what my wife's tax person says.
Expert:  Richard replied 3 years ago.

Principal payments that she is making are not tax deductible.

 

 

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The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.

Customer: replied 3 years ago.

That is not what I asked. I asked if they are TAXABLE. She is now paying taxes on principal payments. This makes no sense.
Expert:  Richard replied 3 years ago.
Principal payments she is paying are clearly not taxable to her because she is paying them. The only thing taxable to her is income that she receives! Why would something you are paying out be taxable to you?
Richard, Tax Attorney
Category: Tax
Satisfied Customers: 45689
Experience: 29 years of experience as a tax, real estate, and business attorney.
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