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This is the real tax loophole for real estate investors. Depreciation is a phantom expense. It doesn’t cost you any cash, but you get a deduction. It doesn’t get much better than that. First thing to determine before you start maximizing depreciation is to calculate whether you should. If you already have a loss or ...

Every active investment or business will have general expenses for management, home office, travel, etc. The question here is where there really is a real estate deduction. In order to take a deduction, the expense must be ‘ordinary’ and ‘necessary’ for the business. One of the accounting & tax challenges for the real estate investor ...

You just spent money fixing up your property. Is it a real estate deduction you can take right now or is it something that you need capitalize and then depreciate over time? My favorite answer:  “It depends.” The reason this is so confusing is because there is some confusing guidance by the time you sort ...

There are three types of real estate deductions you need to track for your business. Today, we’re going to talk about the most common:  Property expenses. Check back over the next few weeks for the rest of the real estate deduction categories. Property expenses. These are the easiest to track. Property expenses are the costs ...

A Section 1031 is also known as a like kind exchange. If you have a property that has gone up in value and/or been depreciated for a number of years, you are going to have gain when you sell.  You may not want to pay tax on all of that right now. That’s where the ...

If you do a like kind exchange for real property or personal property, you have a choice when it comes to depreciation of the remaining basis. You can either depreciate the property using the old depreciation method (from the previous property) or the current depreciation method that is in forcé when you buy the property. ...

One of the things that gets investors stuck in like kind exchanges is investing with partners.  You can not do a like-kind exchange in or out of a partnership for partnership interests. For example, if you have a building that you sell, you can’t then exchange it for a 50% of a partnership that has ...

We’re covering tax strategies for like-kind exchanges this week. Another strategy that older people are using on the Section 1031 is to roll it all into a charitable remainder trust. This is a trust that is setup so that a charity receives either income or the capital (corpus) when you die. The advantage is that ...

When you do a 1031, you roll into another property, and refinance on the back end of it. Then you may need to pull your cash out to buy another property and this is how you start making up for the deficit on the appreciation. Thank you for choosing UsTaxAid Services, we would be glad ...

Capital gains tax rates remain at an near all-time low. If you are selling a property with a big gain, you have a decisión to make. Do you pay the tax now and keep whatever cash is left over?  Or should you roll the property into another one and delay the tax to a future ...