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Hello,
We are considering renting out a house that was a primary residence. We are aware of capital gain exclusion if we sold within 3 years since leaving the house, however, our intent is to keep the house as long as possible, since current rent rates in the area will make the house slightly cashflow-positive.

Another motivation is due to the fact that the tax benefits due to depreciation allowed on a rental property are great. Is there an income limit above which they stop working? In other words, would something like AMT take away these benefits out of your tax returns?

Thanks a lot in advance!
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Not only depreciation, but the ability to deduct loses

Phase-out starts at $100,000 and is completely disallowed at $150,000

Losses are carried forward until the property is sold or taken against future profit
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I am in the 33% tax bracket and I depreciate my rental property.
There isnt a limit that I am aware of.
You also know that when you sell your rental property the Depreciation does come into play at that time.
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I am in the 33% tax bracket and I depreciate my rental property.
There isnt a limit that I am aware of.


Let's see if we can pull this together since both responses are right--as far as they go.

There are no limits on specific types of expenses because of income. If the rental results in a tax profit we're done. If the rental results in a tax loss, which is possible even with a positive cash flow, the income-based phaseout of current loss recognition akg mentioned comes into play, and the loss is carried forward.

Phil
Rule Your Retirement Home Fool
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