Metrics
Illustrative Tax Effect
An educational scenario that applies an assumed marginal rate to modeled taxable rental income or loss. It is not a determination of liability, eligibility, or whether a loss is currently usable.
Why Illustrative Tax Effect matters
Tax treatment can materially affect an investor's outcome, but it depends on the taxpayer, ownership, property use, basis, activity rules, and jurisdiction. TrueCap does not currently expose a tax-specific analysis module; use a qualified professional and taxpayer-specific model.
How to check Illustrative Tax Effect before you rely on it
Treat the figure as a placeholder until a tax professional has your facts. Confirm the marginal rate that applies to you, whether the rental loss is currently usable under passive-activity rules, and how the building-value allocation was set. Then compare the scenario against a case with no tax effect at all; if the deal only works with the tax line, it does not work yet.
Related terms
After-Tax Cash Flow
Pre-tax cash flow adjusted by a taxpayer-specific estimate of income taxes attributable to the renta…
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…
Ready to run the Illustrative Tax Effect math on a real deal?
Free 60-second analysis with labeled starting assumptions and no signup. Pro calculates your Offer Ceiling: the highest price that still meets your targets under the assumptions shown.
Where Illustrative Tax Effect shows up in TrueCap
The analyzer computes this metric on every run from the assumptions you see and can edit, shows it in the results view beside cash flow after reserves and DSCR, and uses your targets for it in Buy Box fit and in the Offer Ceiling — the highest price that still meets those targets. It appears in the written decision memo and the PDF with the same value and the same inputs.