Tools in This Collection
Property Tax Estimator by State
Estimate annual property taxes by state using effective tax rates and assessed values
Rental Income Tax Calculator
Calculate rental income tax with depreciation, mortgage interest, and expense deductions
Home Sale Tax Exclusion Calculator
Check the 2-of-5 year rule, compute your gain, and estimate capital gains tax on home sale
Passive Activity Loss Calculator
Calculate passive activity losses and the $25,000 rental exception with AGI phase-out
MACRS Depreciation Calculator
Calculate MACRS depreciation schedules for business assets, vehicles, and rental property
Car Loan Interest Deduction Calculator
Estimate the business portion of car loan interest deductible against self-employment income
Section 179 Deduction Calculator
Calculate first-year expensing limits for business equipment and vehicles under Section 179
Guides & Articles
Property and Real Estate Tax Workflow
Real estate creates unique tax obligations and opportunities that most homeowners and landlords don't fully exploit. From the $250K home sale exclusion to depreciation on rental property, the tax rules in this space reward careful planning.
For Homeowners: Property Taxes and Home Sale
Your annual property tax bill is based on your local assessor's estimate of your home's value, multiplied by the local mill rate. Most jurisdictions allow appeals if you believe the assessed value is incorrect — the Property Tax Appeal Guide explains the process. When you eventually sell your primary residence, the Section 121 exclusion shelters up to $250,000 of gain ($500,000 for married couples) from capital gains tax if you've lived there 2 of the last 5 years. The Home Sale Tax Exclusion Calculator verifies eligibility and estimates any taxable gain above the exclusion.
For Landlords: Rental Income and Depreciation
Rental income is taxed at ordinary income rates, but landlords can deduct a wide range of expenses: mortgage interest, property taxes, insurance, repairs, management fees, and depreciation. Depreciation is particularly powerful — residential rental property depreciates over 27.5 years, generating a deduction of roughly 3.6% of the property's structure value annually without any cash outlay. The Rental Income Tax Calculator builds a complete rental income picture including all deductible expenses.
Passive Activity Loss Rules
Rental losses can only offset rental income under the passive activity rules — unless you qualify for an exception. The $25,000 rental exception allows passive losses to offset up to $25,000 of ordinary income if your AGI is below $100,000 (phasing out completely at $150,000). Real estate professionals who spend 750+ hours per year materially participating in real estate can deduct losses without limit.
Frequently Asked Questions
How do I reduce my property tax bill?
The most effective approach is filing an appeal if your assessed value exceeds what comparable homes actually sell for. Appeal success rates average 40-50%. Other approaches include applying for available exemptions (homestead, senior, veteran, disability) which reduce assessed value before the tax rate is applied.
How does rental property depreciation work?
Residential rental property is depreciated over 27.5 years using straight-line MACRS depreciation. Only the structure value (not the land) depreciates. On a $350,000 property where $70,000 is land and $280,000 is the building, annual depreciation is approximately $10,182 ($280,000 / 27.5). This reduces taxable rental income without affecting cash flow.
Do I pay tax on the sale of my primary home?
If you've owned and lived in the home for at least 2 of the last 5 years, you can exclude up to $250,000 of gain ($500,000 married filing jointly) from capital gains tax. Gains above the exclusion are taxed at long-term capital gains rates. The Home Sale Tax Exclusion Calculator confirms eligibility and estimates any taxable amount.
Can I deduct rental property losses against my regular income?
Under the passive activity loss rules, you can deduct up to $25,000 of rental losses against ordinary income if your AGI is under $100,000 and you actively participate in the rental. This allowance phases out completely at $150,000 AGI. Real estate professionals meeting the 750-hour material participation test can deduct losses without limit.
What is Section 179 expensing?
Section 179 allows businesses to immediately deduct the full cost of qualifying equipment and software in the year of purchase, rather than depreciating it over multiple years. The 2025 deduction limit is $1,220,000, with a phase-out starting at $3,050,000 of total property placed in service. This is most valuable when you have sufficient business income to absorb the deduction.