Business Glossary

in real estate agent , cash flow from incomeproducing property, less income taxes, if any, attributable to the property's income. The tax savings from the possible shelter of income earned outside the property is added to the cash flow that is earned by the property. For example, if a property generates a $1,000 cash flow and $500 tax loss that can be used to offset other income, the after-tax cash flow for a 33% tax bracket investor is $1,167 (0.33 × $500 + $1,000).

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 saving from the shelter of income earned outside the property, that savings is added to the cash flow that is earned by the property.

Example: A property generates $1,000 per year of cash flow. In the first year of ownership, depreciation and interest deductions provide a tax loss of $3,000. The loss saves $900 of income taxes that the investor would otherwise pay on salary earned as a teacher. The aftertax cash flow is $1,900.