Ushr On Rental Income
Assalamu ‘alaykum, I have an important follow up. If the rental income is $85,000 and the mortgage is $30,000, but the tax paid on this is $6,000 what is the correct calculation? Do we calculate ushr first and then off set with the tax paid (so the ushr at 10 percent is $5,500 but we’ve already paid $6,000 in tax, so nothing further to pay) or do we use the tax as an expense (so the ushr is on 49,000 now, because the 6,000, is just an expense so a further 4,900 to pay)? This is a significant difference, and depends on whether the tax is offset against ushr liability or is just an expense. Please clarify.