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From: ems@amdahl.UUCP (ems)
Newsgroups: net.taxes
Subject: Re: Real Estate Taxes and Tax Reform
Message-ID: <1669@amdahl.UUCP>
Date: Fri, 14-Jun-85 18:21:35 EDT
Article-I.D.: amdahl.1669
Posted: Fri Jun 14 18:21:35 1985
Date-Received: Mon, 17-Jun-85 03:01:23 EDT
References: <257@mhuxv.UUCP>, <2404@mit-hermes.ARPA> <675@charm.UUCP> <1632@amdahl.UUCP> <6057@styx.UUCP>
Organization: Circle C Shellfish Ranch, Shores-of-the-Pacific, Ca
Lines: 44

> > > Real estate taxes on a rental property will be allowed, as
> > > will depreciation.  When considered with your other investment
> > > income, you can't loose more than $5k due to depreciation.
> >
> > Great.  So once again the wage slave gets stiffed.  So who
> > is going to have all this investment income that can be
> > offset by depreciation?  Why, the well to do investor.  And
> > who will have wage income that can't be offset?  Why the
> > grubby little wage slave trying to use the tools of the
> > rich to hang onto some of his money.  Why, we can't have
> > that, now can we.
> 
> Property taxes and depreciation on a rental property are
> deductible because they are EXPENSES incurred in an attempt to
> make money. Owning rental property is a business like any other
> business. You receive income and you pay expenses -- the difference 
> is the profit upon which you are taxed.
> 
> People don't realize the fundamental difference between
> deductions for business expenses and personal (Schedule A)
> deductions.
 ... long discussion of nature of deductions for business
    vs personal use as they stand today ...
> Michael C. Berch

I believe that the original posting was in the context of the
proposed *changes* to the tax law; and that they were to
limit the *business* deduction of depreciation to $5k
more than offsetting investment income.  The point being
made was that offsetting investment income will only
exist among the rich.  The wage earner will be unable to
use depreciation in excess of $5k to shelter his income, while
the rich, whose income comes from investments, will be able to
shelter income with depreciation.

If I have misunderstood the original posting, please post a
clarification.

-- 

E. Michael Smith  ...!{hplabs,ihnp4,amd,nsc}!amdahl!ems

This is the obligatory disclaimer of everything. (Including but
not limited to: typos, spelling, diction, logic, and nuclear war)