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After you enter the property input data and click on run, you are
taken to the "Summary of Inputs" report which summarizes all of the
property input data that was entered except individual operating
expense amounts and yearly growth rate settings for income,
expenses, appreciation and the vacancy rate.
Loan data is summarized and loan payment amounts are calculated
for up to 3 mortgages on a property. Note that the "Adjusted
Gross Income" field is not the income from the property but is the
investor's individual income from all sources including the income
property. The investor's "Adjusted gross Income" and investor
status input fields determine if the investor can write-off rental
losses. Real Estate Professionals can write-off all rental
losses. Passive participants in the management of a rental
property can write-off no rental losses and active participants in
the management of a rental property can write-off up to $25,000 in
rental losses depending on their adjusted gross income.
If you type "No" for Passive Participant and "No" for Real Estate
Professional on the Enter Property Data form, the default is Active
Participant. That is, you are considered to be an active
participant in the management of the income property and can
write-off up to 25,000 in rental losses. Note that if the
income property you are analyzing has a positive income, your status
as an investor in the property doesn't matter. The positive
income from the rental property will be taxed at your marginal
income tax rate.
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