After-tax Cash Flow

After-tax Cash Flow means:
the cash flow from income-producing property, less income taxes, if any, attributable to the property's income. If there is a tax loss that can provide a tax savings from the shelter of income earned outside the property, that savings is added to the cash flow earned by the property. However, losses from passive activities, which include real estate losses, may generally not be used to offset other forms of income, with certain exceptions including real estate professionals.

Example of After-tax Cash Flow:

Learn more about tax examples, explanations and calculations here.

A piece of property generates $3,000 per year of cash flow. In the first year of ownership, depreciation and interest deductions provide a tax loss of $9,000. The loss gives $1.800 of income taxes that the investor would otherwise pay on salary earned as a lawyer. The after-tax cash flow would be $ 5,700.

See State Income Tax in the American Encyclopedia of Law.

See Depreciation in the United States Encyclopedia of Law and Depreciation in the World Encyclopedia of Law.