RentalCalcs · Original decision worksheet

Tax-strategy decision worksheet

Compare the deduction with the amount you can actually use, then account for the fee and later years. Fill locally, then print or save as PDF. Nothing is submitted or automatically saved.

Read the complete worked guide

Worked example

The hypothetical $750,000 duplex enters service in March 2026. Building-only depreciation is about $17,273; the supported study allocation gives $162,955. With $50,000 of usable passive income, the extra current federal tax reduction is $10,473 at 32%, or $5,473 after the assumed $5,000 fee. About $112,955 remains suspended.

1. Establish eligibility and basis

Asset classes, supported basis and excluded land; source recordsAcquisition evidence: contract, conditions and relevant datesReady-and-available service date for each asset; rental recordsElections, method and recovery periods; preparer questions

2. Compare current use in both paths

Depreciation without and with the proposed allocation; same datesAvailable passive income or allowance, prior losses and applicable limitsDeduction usable now in each path; suspended balances kept separateIncremental usable deduction × appropriate rate; actual fee and funding

3. Include later consequences

Later annual deductions and when carryforwards may become usableFederal/state differences, separate basis records and current-year sourcesPlanned sale: asset allocations, basis, tax character and alternative exitDecision, unresolved evidence and next action with the tax preparer

Calculation notes

Extra current tax reduction = (study deduction usable now - benchmark deduction usable now) × assumed marginal rate. Subtract the fee separately. This illustration uses $150,000 qualifying short-life basis, $450,000 structure, $150,000 land, 9.5 first-year months and 32% federal tax. The calculators simplify timing and do not determine usable passive losses. No state tax, fee deductibility, NIIT, QBI or sale tax is included.

Reviewed October 15, 2026. Original RentalCalcs educational worksheet. Numbers are hypothetical, not a property estimate, tax return or promise of tax savings. IRS: passive activity loss calculations.