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Tax Analysis

 

 

The Tax Analysis is used to show you the income tax consequences for this particular year. The calculation is quite simple.  From the total Income generated by the property, subtract all the items that are allowed as deductions by the IRS.   The result is the Gross Tax (Loss) or Gain.  Note that this amount is not the actual number of dollars paid or saved.

Income.  The Monthly Income multiplied by 12.  It is then adjusted for inflation using the Inflation and Discount Rate.
Vacancy. The income computed above multiplied by the Vacancy Rate.
Interest Payments. The total amount of the mortgage payment(s) applied toward interest this particular year.
Taxes. The Annual Taxes due.  It is adjusted for inflation using the Inflation and Discount Rate.
Insurance. The Annual Insurance amount due.  It is adjusted for inflation using the Inflation and Discount Rate.
PMI. The annual PMI amount due.
Expenses. The Annual Expenses amount.  It is adjusted for inflation using the Inflation and Discount Rate.
Depreciation.  The amount you are able to take as depreciation for this particular year. It is computed by dividing the original value of the property without the land (computed using the Purchase Price and the Land To Improvement Ratio) by the Depreciation Rate.
Gross Tax (Loss) Gain.  The Income minus these tax-related expenses.

   

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Last modified: May 03, 2001
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