BiggerPockets

Coloradro Investment with 13% ROI

Monday, October 24

This weekend, the investor I work with, put offers on two Townhomes that will net him a 13% return.  Colorado has a low vacancy rate, increasing rents and amazing REO deals, so where else can you see that return?  Great time to invest with low interest rates.

Agents - Own Rentals - Tax Advantages

Saturday, February 12

 

Let's say that you are a rental property owner and you spend more on the property than you earn during the year -- a depressingly common occurrence these days. Naturally, you'd like to be able to deduct your loss from any nonrental income you have, thereby reducing your taxable income and lowering your taxes for the year.

Unfortunately, losses from real property rentals are classified as "passive activity losses." Special passive activity loss rules greatly limit the amount of losses that a rental property owner can deduct from other nonpassive income, such as salary or other business income.

A maximum of $25,000 can be deducted from nonpassive income each year, and even this is phased out if the owner's adjusted gross income exceeds $100,000. Unused losses must be saved for future years.

But real estate professionals can qualify for a special exemption from the passive loss rules -- an exemption nobody else can get. If you qualify, you may deduct any amount of rental activity losses you have for the year from your other income -- such as real estate commission income -- regardless of how high your income for the year may be (see Internal Revenue Code Section 469(7)).

For example, a real estate broker who loses $100,000 from his rentals could deduct the entire amount from his commission income.

For Sellers Only

Saturday, February 05