Archive for the ‘Tip Of The Day’ Category

New Real Estate Tax in 2013 for Foreclosure

If you walk away from your real estate in 2013, you may find that you can’t walk away from your taxes. This is especially a problem if it’s your principal residence, at least the way the current tax law is written. If you lose your home to foreclosure or sign it over with a deed-in-lieu-of ...

New Real Estate Tax in 2013 for Investors

There is a new tax coming in 2013. Actually, there are several. The 2010 Health Care Bill is finally kicking in with the extra tax that will soon be hitting a lot of us. One of these taxes is called “real estate tax.” We’re going to talk about what this tax actually is, and not ...

Does a Section 1031 Like Kind Exchange Still Make Sense?

A Section 1031 aka like-kind exchange allows you to defer taxable gain on a property to a future date. Here’s how the simplest 1031 exchange works: You have a property that you will be selling at a significant gain and don’t want to pay tax on it right away. Your plan is to invest the ...

The Importance of Putting Your Property in Service Fast

Well, it happened again last December. Every year, there is bound to be a few people who are so caught up fixing a property to get it ready for rental that they forget to check in on their tax strategy first. And that mistake costs them thousands of dollars in excess tax. The issue is ...

How to Maximize Depreciation

Depreciation is a real estate investor’s secret tax weapon. It’s a phantom expense, which means it doesn’t cost you any cash but you get a tax deduction anyway. When you buy an asset you don’t get an immediate expense, instead it is capitalized and then depreciated over time. In the case of real estate, there ...

Series LLCs and Real Estate Investors

Series LLCs are now recognized in 8 states, with other states allowing the formation in their state without having specific law. If you haven’t heard of a Series LLC, don’t feel badly. A lot of people have not heard of them and they are very different from other types of business formations. A Series LLC ...

What’s a Real Estate Deduction?

I get this question all the time. What can I deduct? Business owners ask it. Real estate investor ask it. The answer is: Anything that is ordinary and necessary to the production of income. So, bottomline: It depends. For your real estate, there are a couple of other things that you need to consider. First, ...

Tax Troubles for Real Estate Dealers

The term “Real estate dealer” is used by the IRS to identify someone who buys and sells real estate, like any other kind of product. You’re not a real estate investor, holding property for long term passive income. You’re buying and flipping to create immediate income. The real estate dealer status means that, at least ...

The Importance of Active and Material Participation for Real Estate Losses

If you have real estate losses, you may or may not be able to take those losses against your other income. If you make less then $100,000, you can take a loss of up to $25,000, provided you have active participation in the real estate. That means you spend 100 hours or more per year ...

Considerations Before You Walk Away From Bad Real Estate

We’re firmly into the next wave of real estate default. In some cases, people have no choice having lost jobs and investments and simply can’t hang on. In other cases, owners are making strategic default decisions. The property is simply too underwater with debt for it to make sense to keep paying. And since the ...