im having a hard time understanding (active participation rental real estate taxes )example;; I have a property portfolio making 200,000 a year ....i fall under the 15% tax bracketso i owe uncle sam 30,000 thousand ...but i paid 30,000 in taxes interest repairs ect...does it mean i owe nothingthanks in in advance
rental income is passive income no matter how you do it tro is wrong. Not all Rental Real Estate is passive, but it is rare that an individual can claim the at-risk designation to make it active and not passive. I have a property portfolio making 200,000 a year If you have a portfolio that earns you $200K in rent per year, you most certainly do qualify for at-risk and the activity is active, not passive. but i paid 30,000 in taxes interest repairs ect What taxes? Real Estate Taxes? No, these are entirely different and separate from Income Taxes. They aren't even paid to the same governing body. Uncle Sam is the Federal Government while RE Tax is paid to the city/town or county; in other words a municipal government.
rental income is passive income no matter how you do it if you actively participate it means you spend time either in the administration or the maintenance of the property, if you are not an active participant, you have someone else do everything that is needed ie. if you were 500 miles away you likely would not be making regular trips to maintain the property and rental property is not taxed differently that your other income, if you are in the 15% bracket and this net rental income does not put you in the next bracket you are still in the 15% bracket and no the $30000 interest, taxes and repairs do not directly relate to your tax bill the rental is filed on Sch E, and there are limitations to passive income, ie. $25000 so it your taxes, interest and repairs exceeded your income the limitation would apply
