Capital Gains and Losses

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Here is my situation. I own a townhome in Seattle WA. I am…

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So, here is my...

So, here is my situation. I own a townhome in Seattle WA. I am now moving to CA, and I am going to rent my home in Seattle. I am going to charge $3200 for monthy rent of my Seattle home. My current mortgage is $960 per month. What percentage of my rental income will be taxed? Basically I am just trying to find out the rental net income after taxes

Accountant's Assistant: The Accountant will know how to help. Is there anything else the Accountant should be aware of?

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Submitted: 2 years ago.Category: Capital Gains and Losses
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Answered in 11 hours by:
3/8/2016
Tax Expert: TaxRobin, Tax Preparer replied 2 years ago
TaxRobin
TaxRobin, Tax Preparer
Category: Capital Gains and Losses
Satisfied Customers: 18,363
Experience: 15+ years in Tax preparartion as well as Instructor for tax law, theory, and application
Verified

Hello

You will be allowed to deduct the interest on your mortgage but not the principle.

In most cases, the expenses of renting your property, such as maintenance, insurance, taxes, and interest, can be deducted from your rental income.

the most common rental expenses.

  • Advertising.

  • Auto and travel expenses.

  • Cleaning and maintenance.

  • Commissions.

  • Depreciation.

  • Insurance.

  • Interest (other).

  • Legal and other professional fees.

  • Local transportation expenses.

  • Management fees.

  • Mortgage interest paid to banks, etc.

  • Points.

  • Rental payments.

  • Repairs.

  • Taxes.

  • Utilities.

Because of all the above you may not have any rental income at all. Just the rental income left after all the expenses will be taxable.

Please remember to rate my service excellent once you have all the information you need. If you have any other questions, please ask me – I’ll be happy to respond. Thank you!

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Tax Expert: TaxRobin, Tax Preparer replied 2 years ago

Please let me know if you need clarification

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Customer reply replied 2 years ago
Hi Robin,
Thank you for your response, but that still doesn't tell me what I need to know. Let's assume for a moment that the expenses that you listed amount to $400. So this is the scenario we are assuming:I charge for rent $3200
I pay for mortgage $1000
Additional rental expenses amount to $400That means that we are left with $1800. Now, what percentage or amount is going to go on taxes from that $1800?Thanks
Tax Expert: TaxRobin, Tax Preparer replied 2 years ago

The rental income would be added to your other income and taxed at your regular rate for your filing status.

There is no special rate of tax for rental income.

If the $21600 was your only income for the year and you were single then your tax for the year would be $1,233.

Your percentage of tax would be 5.6%.

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Tax Expert: TaxRobin, Tax Preparer replied 2 years ago

Did that give you the % you were looking for

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