Rental House

Forum|Forum|2 years ago
October 25, 2023
1 reply
10 views

I am thinking of acquiring a new rental property. What is the tax rate on the dividends in Tennessee? What happens if the property depreciates while I am renting it out?

Ask the Experts - Extension - Sept 2023

DashonnonH

Level 5

Hi Jess, I hope your day is going well!

The information below comes from TN Department of revenue...

Tennessee joined the ranks of no-income-tax states in 2022 with the phaseout of the Hall Tax on interest and dividend income. The Hall Income tax was repealed for tax periods that begin on January 1, 2021, or later. Please do not file a return for any tax year that begins on or after January 1, 2021. You will not pay any income taxes on Interest and Dividends income.

Your rental property will surely depreciate in value over time. The IRS requires that you take a deduction for depreciation of a rental home on your tax return. If you do not take the depreciation, the IRS treats as if you did take the depreciation. A rental home is depreciated on a tax return for 27.5 years (39 years for commercial rental property).

https://turbotax.intuit.com/tax-tips/rental-property/tax-deductions-for-rental-property-depreciation/L8tf7BPWz