Metrics
Illustrative Tax Effect
Illustrative monthly year-1 tax effect at the entered marginal rate: modeled deductions netted against modeled taxable rental income. A positive or negative result is a scenario output, not a determination of the taxpayer's liability or current ability to use a loss.
Why Illustrative Tax Effect matters
Depreciation can materially change modeled taxable rental income. TrueCap's figure is deliberately simplified: it applies the entered marginal rate and does not decide whether a loss is currently usable under passive-activity, at-risk, or material-participation rules. The estimate also runs both ways, so positive taxable rental income can produce a negative net tax impact.
Related terms
After-Tax Cash Flow
Monthly cash flow plus the estimated year-1 net tax effect — deductions (depreciation, deductible in…
Depreciation Period
27.5 years for residential rentals (IRS standard); 39 years for commercial. Determines annual non-ca…
Building Value %
Portion of purchase price allocated to depreciable building (not land). Defaults to 80% for SFR; lan…
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