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Video instructions and help with filling out and completing Who Form 4797 Housing

Instructions and Help about Who Form 4797 Housing

Hi I'm Julia M Spencer I'm a real estate adviser investor and your number one source for real estate advice online with this little short video I want to talk a little bit about depreciation I had some questions from some of my subscribers to my youtube channel to my Facebook regarding depreciation some new investors that wanted to get into real estate investing and didn't quite understand the concept of depreciation and how it would affect their portfolio or in their tax returns or even their cash flow so I wanted to make this brief video to explain those two concepts how does depreciation impact your tax return and how does the appreciation impact your cash flow let's talk about it depreciation is a deduction but not a cash outflow expense that is the big difference of depreciation versus any of the other expenses the thrill estate investing it depreciation actually reduces taxable income which is where it has the most benefit for you and I wanted to demonstrate that with a really simple example let's talk about that let's say we have a $100,000 property in the income that that property generates is 10k per year ten thousand dollars per year let's assume that $100,000 property generates one thousand dollars every month in rent and it's vacant for two months out of the year and basically your expenses for that particular property are of four thousand dollars per year that leaves you with a profit of six thousand dollars per year now if there was no depreciation expense that you could take this property basically that 6k profit would be taxed at whatever you go in tax rate is for this particular example I assumed it's thirty percent and that would be $1,800 so take one thousand eight...