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So with the purchase down the purchaser can get a thirty yr set price at 5.75%25. The principal and interest payment would then be $1,750.seventy two/month for principal and interest. This would depart an initial money movement following debt service without benefit of interest and depreciation of $2,137-$1,750.seventy two/month =$386.28/month cash flow. The interest deduction would be $17,250/year. The depreciation with $75,000 on the land the enhancement at say $300,000/27.five = $10,909.09/year. Therefore our following tax money movement would be Net Working Income: $25,644/year -$17,250 interest deduction - $10,909= ($2,515) tax loss. If the proprietor is in the thirty%twenty five tax bracket this would save $754 in federal income tax.

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