My scenario isn't particularly «
generous» — only a high wage earner would qualify for an $ 800,000
mortgage, and the
interest paid on that
mortgage, as well as the property
tax, significantly exceeds the standard
deduction, as does the state income
tax likely paid by that wage earner (as an example, I pay tens of thousands of dollars in state income
tax in California — all deductible from my federal
tax return).
If you are
generous, and provide others with a place to live, the government rewards you with cool
tax incentives like «depreciation» and
mortgage interest deductions that help reduce the amount you pay each year in
taxes.