Tax Example: Rent

August 01, 2007

Non-resident couple's joint monthly rental income1 US$1,500 US$6,000 US$12,000
Annual Rental Income 18,000 72,000 144,000
Less Costs2 (1,130.00) (4,370.00) (8,690.00)
Less Depreciation3 (5,454.55) (16,727.27) (33,454.55)
= Taxable Income US$11,415.45 US$50,902.73 US$101,855.45
Gross Revenue Tax (Assessed)4 270.00 1,440.00 3,600.00
Income Tax Rates5
Up to US$15,650 10% 1,141.55 1,565.00 1,565.00
US$15,650 - US$63,700 15% - 5,287.91 7,207.50
US$63,700 - US$128,500 25% - - 9,538.86
Annual Tax Due US$1,141.55 US$6,852.91 US$18,311.36
Other Taxes Levied
Gross Revenue Tax (270.00) (1,440.00) (3,600.00)
Rebate Base6 US$871.55 US$5,412.91 US$14,711.36
Income Tax Rebate (784.40) (4,871.62) (13,240.23)
Net Income Tax Due US$87.16 US$541.29 US$1,471.14
Annual Income Tax Due US$357.16 US$1,981.29 US$5,071.14
Tax Due as % of Gross Income 1.98% 2.75% 3.52%
Thanks to:
Burger & Comer, P.C.

DISCLAIMER: The information contained above is marketing material only and is not written tax advice directed at the particular facts and circumstances of any person and should not be relied upon. We encourage you to discuss your particular situation with us or an independent tax advisor. This information was last updated on August 1, 2007.

Notes


1 The property is jointly owned by husband and wife, but then taxed separately (50% upon each partner).

2 Estimated values. Deductible costs are business license, management fees, repairs and maintenance.

3 Estimated values. Residential properties are depreciated over a period of 27.5 years.

4 Gross Revenue (Turnover) Tax will be assessed but it is credited against income tax. The tax depends on the annual turnover and is not a graduated tax:

ANNUAL TURNOVERS, US$ TAX RATE
Up to US$5,000 nil
US$5,000 - US$50,000 1.5%
US$50,000 - US$100,000 2.0%
US$100,000 - US$250,000 2.5%

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