Final answer:
A deductible is the maximum amount that an insurance policyholder must pay out-of-pocket before the insurance company covers the remaining expenses. In the context of rental expenses, deductible rental expenses refer to the expenses that can be subtracted from rental income to determine taxable rental income.
Step-by-step explanation:
A deductible is the maximum amount that an insurance policyholder must pay out-of-pocket before the insurance company covers the remaining expenses. In the context of rental expenses, deductible rental expenses refer to the expenses that can be subtracted from rental income to determine taxable rental income. These expenses include mortgage interest, property taxes, insurance, repairs, and maintenance.
For example, if you earn $10,000 in rental income and have $3,000 in deductible expenses, your taxable rental income would be $7,000. Deductible rental expenses can help reduce the tax liability of rental property owners.
It is important to note that deductibility of rental expenses may vary depending on the specific tax laws and regulations of a country or state.