Originally Posted by
upside_umop
Fungus, I think GGG is right. Its because he's making a loss on his properties. Cashflow neutral is the best leverage to have....
If he was making a loss of $30,000 on all his properties, he would not be taxed at all right? Now consider his expenses decrease by $30,000. This is a tax free gain. (Was an inefficent structure from the start if he was making a loss..)
This is assuming, however, that he is not offsetting his property losses against his income. If GGG is, then the decrease in $30,000 is actually being taxed, as he wont be able to offset his taxable income at year end by the loss on rentals.
Are your properties in a trust, company, or personal GGG?