Writeoffs - Tax Law
I know for income producing properties you can write off your interest and depreciation from your net income, but what if your depreciation and interest combined are higher than your net income can you recieve a tax credit or do you just not have to pay taxes. How does this all work?
For example, say my Net Income is $50,000 for the year, my depreciation is $30,000 and my interest is $30,000. Intially my taxable basis is the $50,000, then I can write off my interest ($30k) and depreciation ($30k), right? But since my write offs total $10k more than my taxable basis can I recieve a credit for that???
Also, can you write off property taxes?
Thanks guys!
[ Edited by farrisb on Date 05/10/2007 ]
bargain76,
If one takes your advice literally, then on paper the company will be making a continuous loss and will become aN IRS proble. If the company is not making a loss, then it only compunds your problem becuase that is additional income that the Original Poster would have to pay taxes on.
Is there a way to implement your suggestions without raising a red flag to the IRS?
Thanks,
JS.