What factor is typically included in the calculation of operating expenses?

The calculation of operating expenses typically includes property taxes, as they are a recurring and necessary cost associated with owning and managing a property. Operating expenses encompass all expenditures that are required to keep a property functional and productive on a day-to-day basis. This includes costs such as maintenance, utilities, management fees, insurance, and, importantly, property taxes.

Property taxes are assessed by local governments and are based on the value of the property. They are typically incurred annually and can significantly affect the overall cost of ownership, making them a vital component of operating expenses. This means that any analysis of a property's financial performance would need to factor in property taxes to understand fully the economic implications of running the property.

In contrast, debt service, personal income, and capital gains tax do not fall under operating expenses. Debt service relates to the mortgage payments on the property and is considered a financing cost rather than an operating expense. Personal income is unrelated to property operations, as it pertains to individual earnings. Capital gains tax is incurred when a property is sold and is not a recurring expense associated with the operation of the property itself. Thus, property taxes are correctly identified as a critical factor in the calculation of operating expenses.