jwilkerson
First Time Poster
Cash: $ 0.25
Posts: 1
Joined: 29 Apr 2006
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| Condo Hotel and Taxes Question |
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I am considering the purchase of a condo hotel and need to know the tax benifits of such (I am visiting my CPA in a week or so, but would like to have some sort of idea before). For those of you who don't know, a condo hotel is like a normal hotel, except that investor own each suite and split the profits with the hotel chain. The hotel chain is responsible for upkeep, marketing and renting out the suite. Running the initial numbers, without tax benifits, it looks like I would be in the red each month. I am trying to find out if how much I would save a year on taxes. I believe I can possibly write off the interest on the loan, and am trying to find out how I can calculate the tax savings from this.
1. Do you use the amorziation formulas to calculate the interest, so that every year the total interest goes down, or do you spread the interest over the life of the loan, so that each the the interest is the same?
2. How to calculate the tax savings? Is it the entire interest amount or would it be the interest amount times your tax bracket percentage? Is there a cap on the amount you can write off. I also own a house an am writing off the interest on that as well. I am also subject to the alternative minimum tax if that makes a difference.
Any help would be appreciated. I have been searching the internet for weeks, but can't find anything.
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