Re: Tax Question - Posted by Dave T
Posted by Dave T on February 16, 2001 at 22:24:05:
Based upon the information in your post, and without looking at your completed tax return, I am going to make some gross assumptions.
- Your gross combined W-2 income is about $90K
- Your itemized deductions are about $12900
- Your rental real estate “tax loss” is about $25K.
- Your taxable income is about $46300.
Now it would appear that you are experiencing the marriage tax penalty first hand. Last year, I suspect that each of you were in a lower tax bracket but your combined incomes put you in the next higher tax bracket. This may be the reason that your refund is smaller than last year, if all other income factors were essentially the same.
You lament that you aren’t profiting from your rental properties. If your cash flow from the properties is only break even, consider this silver lining: If your rental activities have produced a “paper loss” of $25K this year, that’s a $25K reduction in your taxable income. This means your rental properties have reduced your tax bill by $7000 this year.