Rental Property Cash Flow and Tax Calculator
Compare a rental's cash flow with its taxable income after mortgage interest and depreciation, for a long-term lease or an Airbnb. Then estimate the tax effect with your own marginal rate. Free, no signup.
Cash flow and taxable income are two different numbers
Landlords are often surprised that a rental can put money in their pocket and still show a loss on the tax return, or the other way around. Two items cause most of the gap:
- Loan principal is cash out of your pocket, but it isn't deductible. Only the interest is.
- Depreciation is deductible, but no cash leaves your account. A $284,000 residential building basis gives about $10,326 a year (27.5 years).
Repairs are deducted right away, while improvements such as a new roof are depreciated over time. See the rental property tax guide for how to tell them apart.
Short-term rentals: extra items to count
- Platform fees. The host service fee the platform keeps is a deductible expense.
- Occupancy and sales taxes that Airbnb or Vrbo collect and pay for you (15% room occupancy tax in Connecticut; state and local sales tax plus local occupancy tax in North Carolina) aren't your income or your expense.
- Cleaning fees you charge guests are rental income; what you pay a cleaner is an expense.
- Personal use. If you also stay there, expenses must be split. Our day count checker shows which rules apply.
About the marginal rate
The tax figure multiplies taxable rental income by one combined rate you enter. North Carolina's individual rate is a flat 3.99% for 2026. Connecticut's rates are graduated, from 2% to 6.99% in the most recent CT-1040 tables. Add your federal bracket. For a real number, your whole return has to be run, which is where a tax preparer helps.
Related: Rental depreciation calculator · Airbnb tax guide · All rental and Airbnb tools
Frequently asked questions
Why is my rental profitable but showing a loss for taxes?
Depreciation is a deduction with no cash cost, and it often turns positive cash flow into a taxable loss. The reverse happens when large principal payments reduce your cash but aren't deductible.
Can I deduct my whole mortgage payment on a rental?
No. Only the interest portion (plus property tax and insurance if they are escrowed) is deductible. The principal part repays the loan and isn't a deduction.
Can a rental loss reduce my other taxes?
Sometimes. Rental losses are generally passive. If you actively participate, you may deduct up to $25,000 of loss against other income when your modified AGI is $100,000 or less, phasing out completely at $150,000. Unused losses carry forward to later years or until you sell.
Do I count Airbnb occupancy taxes as income?
Not when the platform collects and pays them to the state or county for you. Your income is the rent and fees paid to you; the platform's host fee is a deductible expense.
Is this calculator investment advice?
No. It is a tax estimate for a rental property. It does not judge whether any property is worth owning, buying or selling.
Sources (Checked November 2026)
- IRS Publication 527 (2025), Residential Rental Property (Including Rental of Vacation Homes)
- IRS Publication 925 (2025), Passive Activity and At-Risk Rules
- IRS Instructions for Schedule E (Form 1040)
- CT DRS: Room Occupancy Tax information (rates, OP-210, registration)
- NCDOR: Rentals of Accommodations (sales tax)
- NCDOR: Tax Rate Schedules (individual income tax)
- CT DRS: Connecticut income tax rate schedules (2% to 6.99%), Form CT-1040 instructions
Free education only. Not tax, legal or investment advice, and not a promise of any result. Tax rules change, so confirm with the IRS (irs.gov), the CT Department of Revenue Services (portal.ct.gov/drs), the NC Department of Revenue (ncdor.gov) or your town or county before you act, and ask your tax preparer about your own situation.
Want to see how your rental fits into your whole tax return?
Or call (475) 242-7941. Services are priced by quote.
Enhance Finance LLC · Andrew Nocera, Tax Preparer & Small-Business Finance Consultant. Based in Connecticut and working with North Carolina clients remotely.
Not tax, legal or investment advice. Figures are estimates for education. Checked November 2026.