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CoastMath carries each home, vehicle or other property at a value that grows at the fixed annual rate you enter. Every year you own it, CoastMath charges its property tax, maintenance and insurance as spending, whether or not a loan is attached. Its value counts toward net worth, but it never funds spending unless the property is sold. A property can be one you own today or one you plan to buy, and a rental property also earns rent and is depreciated for tax.
Each property has a current value, an annual appreciation rate, its carrying costs, and optional sale settings. The sale settings are explained in Selling a home or property.
Turn on Planned purchase to buy the property at the start of a future month. Until then it has no value, costs, rent or loan. At the purchase, CoastMath pays the down payment and closing costs, or the full price and closing costs when there’s no loan, and starts a loan for the rest.
- Loan rate (%, blank for no loan) and Loan term (months) create a fixed-payment loan linked to the property. Its payments start in the purchase month, and a sale pays it off like any linked loan (see Mortgages and loans).
- Pay from chooses the account that pays the cash due. If that account runs short, the rest is unfunded spending rather than a withdrawal from another account. With Withdrawal order, the cash due is paid like any other expense: from the year’s income first, then from your withdrawal order.
In the cash-flow view the payment appears as “name purchase”. A purchase date before the plan starts means you already own the property, and no purchase is modeled.
Value at year end=Value at year start×(1 + appreciation rate)
Growth compounds once a year. If a year is only partly owned (a plan that starts partway through the year, or a sale year), the rate is compounded over that fraction of the year. For example, half a year at 4% grows the value by about 1.98%. The rate never changes: every Success odds trial and every historical stress test uses the rate you entered, not market returns.
Carrying cost for the year=Property tax+Maintenance+Insurance
A rate uses the value at the start of the year, before that year’s appreciation. A dollar amount is your entry grown by inflation since the plan started.
| Value at the start of the first year | $500,000 | |
|---|---|---|
| × | Property tax 1.1% + maintenance 1% + insurance 0.4% | 2.5% |
| = | First-year carrying cost | $12,500 |
| Value at the start of the second year$500,000 × 1.04 | $520,000 | |
| × | Same rates | 2.5% |
| = | Second-year carrying cost | $13,000 |
Choose rates or dollar amounts according to how you expect the cost to grow. A rate follows the property’s value, and a dollar amount follows inflation. With appreciation above inflation, rate-based costs pull ahead over time.
- Entered as rates
- Entered as dollar amounts
Both start at $10,500: rates of 1.1% and 1%, or amounts of $5,500 and $5,000. The home appreciates 4% a year and inflation is 3%. No insurance is included.
Show data
| Year | Entered as rates | Entered as dollar amounts |
|---|---|---|
| 2026 | $10,500 | $10,500 |
| 2027 | $10,920 | $10,815 |
| 2028 | $11,357 | $11,139 |
| 2029 | $11,811 | $11,474 |
| 2030 | $12,284 | $11,818 |
| 2031 | $12,775 | $12,172 |
| 2032 | $13,286 | $12,538 |
| 2033 | $13,817 | $12,914 |
| 2034 | $14,370 | $13,301 |
| 2035 | $14,945 | $13,700 |
Carrying costs are charged every year the property is owned, including years before and after a loan is paid off. In a sale year, they’re charged only through the month before the sale. They’re essential spending, paid from that year’s income first and then from withdrawals in your withdrawal order. In the cash-flow view, each property has one line: “name (property tax & upkeep)”.
The property tax you enter counts toward the state and local tax deduction if you itemize (see Itemized deductions). Maintenance and insurance aren’t deductible. On a rental property, all three are rental expenses instead (see below).
Set Sale tax treatment to Rental property to enter rent and depreciation. Rent after vacancy is income each year the property is owned, and it reaches your accounts as cash. The amount taxed is the net rental income: rent minus operating expenses, the property’s tax, upkeep and insurance, interest on loans linked to it, and depreciation. It is ordinary income and investment income for the net investment income tax, but not self-employment income.
| Annual rent | $36,000 | |
|---|---|---|
| − | Vacancy at 5% | $1,800 |
| = | Rent collected | $34,200 |
| − | Operating expenses at 10% of rent collected | $3,420 |
| − | Property tax | $4,000 |
| − | Depreciation$300,000 basis × 75% building ÷ 27.5 years | $8,182 |
| = | Net rental income taxed | $18,598 |
Depreciation
The building is depreciated in equal amounts over 27.5 years for residential property or 39 years for nonresidential property. Land isn’t depreciated, so enter either Land value (% of cost) or Building basis ($). Without either one, depreciation is left out and the projection shows a warning. In the year you buy, depreciation starts in the middle of the purchase month; in the year you sell, it stops in the middle of the sale month. For a property you already own, enter Depreciation already taken ($): the schedule stops when the total reaches the building basis, and the adjusted tax basis you enter should already be reduced by it.
Rental losses
A net rental loss is a passive loss. With I actively participate checked, up to $25,000 of it a year offsets other income. That allowance shrinks by half of your income above $100,000, measured before rental income or losses and Social Security. Losses above the allowance carry forward. They offset later rental income, and all of a property’s carried losses become deductible in the year it is sold.
- Maximum allowance
- $25,000
- Phase-out starts
- $100,000
- Fully phased out
- $150,000
- Married filing separately, lived apart all year
- $12,500
- Phase-out from $50,000; no allowance if you lived together
| Rent collected | $10,000 | |
|---|---|---|
| − | Expenses and property tax | $23,000 |
| − | Depreciation | $8,727 |
| = | Net rental loss | −$21,727 |
| Allowance: $25,000 − 50% × ($120,000 − $100,000) | $15,000 | |
| → | Loss deducted this year | $15,000 |
| → | Loss carried forward | $6,727 |
Part rental, part personal use
A property can be partly rented and partly yours, such as a duplex you live in half of. Enter Rented share of the property (%); blank means fully rented. For your main home, check Part of the home is rented out under Primary residence to show the rental fields. Each year, CoastMath treats the rented share as a rental: that share of the rent, operating expenses, property tax, upkeep, insurance, loan interest and depreciation goes into net rental income, and the passive loss rules apply to it. Your share of the property tax stays an itemized deduction, and so does your share of mortgage interest on a main home. The property still pays all of its costs in cash.
| Rent if fully rented | $40,000 | |
|---|---|---|
| × | Rented share | 50.0% |
| = | Rent collected | $20,000 |
| − | Half of $4,000 operating expenses | $2,000 |
| − | Half of $8,000 property tax | $4,000 |
| − | Half of the depreciation$400,000 × 75% building ÷ 27.5 years × 50% | $5,455 |
| = | Net rental income taxed | $8,545 |
| → | Property tax left for itemizing | $4,000 |
When the property is sold, the gain up to the depreciation taken is always taxed, even on a main home. The rest of the gain is split by the average rented share over the years you owned it. On a main home, the home-sale exclusion covers your share when you pass the ownership and use test, and years before 2009 count as your own use. The rented share’s gain is taxed. A loss is deductible only for the rented share.
| Gain on the sale$700,000 sale price − $450,000 adjusted basis | $250,000 | |
|---|---|---|
| − | Depreciation taken, always taxed | $30,000 |
| = | Gain to split | $220,000 |
| × | Your share (not rented) | 75.0% |
| = | Gain excluded | $165,000 |
| → | Gain taxed, including the $30,000 | $85,000 |
Net worth includes each property at its projected value. Any loan against it is subtracted as a separate debt (see Mortgages and loans). Property value isn’t available for spending: shortfalls are covered only from accounts. The one exception is a property set to be sold automatically when accounts run out. Read the overview and net worth shows where property appears in the results.
Measures of liquid wealth leave property out. These include The financial independence estimate and any financial independence milestone set to “Liquid accounts minus debt”. Only a milestone set to “Total net worth incl. property” counts it.
Appreciation isn’t taxed while you hold a property. Tax applies only in the year of a sale, according to how the property is classified:
| Classification | Gain | Loss |
|---|---|---|
| Primary residence | Taxed as a long-term capital gain after the home-sale exclusion | Not deductible |
| Personal use (home, vehicle or other property) | Taxed as a long-term capital gain | Not deductible |
| Investment capital asset | Taxed as a long-term capital gain | Deductible under the capital-loss rules |
| Rental property | Gain up to the depreciation taken taxed at no more than 25%; the rest as a long-term capital gain | Deductible against ordinary income |
| Needs review | Taxed as a long-term capital gain | Not deductible until you choose a classification |
A property marked Primary residence is treated as personal use unless part of it is rented out.
A property that is still classified as Needs review and has a sale year or automatic sale set adds a warning to the projection. Selling a home or property covers how the gain is measured and when the exclusion applies. Capital gains, dividends and investment taxes covers the rates.