AboutIvan Roth Expertise Federal and State Income taxes I do tax returns for partnerships and C corporations I am well versed with State Franchise taxes for CA, CT, FL,NY,TN,TX.
Experience Eight years as tax manger for a real estate company
Question Hi irxq
Have talked to you before and really appreciate your help. Is there a correlation between depreciation and interest in regards to deciding when an owner should sell(or not sell) income-producing property? In other words, if one exceeds the other. Or other rules of thumb you're aware of. I know that when to sell depends on other factors as well so this is a "generally speaking" type of question. I just want to be able to talk intelligently when I discuss this with investment property owners. I've signed up for some classes on real estate investment analysis and have also started reading couple of books. Haven't found the answer to this yet though.
Thanks so much for your help.
Don
Answer depreciation relates strictly to a tax deduction that may be available to owners of commercial property.
Interest on the other hand affects the property's cash flow a much more inportant consideration when acquiring or dispossing of property .
However as previously discussed before any action by a buyer or a seller must relate mostly to what is the property's ability to generate future cash flow. Or are there better oportunities for cash flows and appreciation in other investments and also one's tolerance for risk and reward. ie investing in medical research vs puting one savings into certificates of deposit.
