People keep mentioning the tax advantages of real estate and asking me about how that must be a huge benefit to my family. I also just read a whole book about tax "loopholes" (written in 2005 by the way). That was really about taking losses and using it to offset income and using depreciation. Now i'm not going to lie I did learn a few things but I'm not sure that I will ever use them! Why?
Because my tax strategy can be summed up like this: MAKE SURE TO PAY JUST ENOUGH TAX FROM THE MOUNTAIN OF MONEY THAT MY PROPERTIES GENERATE THAT I DONT GET FINED IN APRIL. DONE.
If you are tempted to own real estate for tax loss harvesting or for tax advantages only......... QUIT. NOW.
Thanks for letting me blow off some steam!!!!
Happy New Year!!!!!
I like the tax break regarding deprecation. As we are in the "acquire" part of the stage profit is needed. Personally while I am capable of doing my own taxes. I hire a CPA so she is responsible for everything.
Yes tax advantages are not the only reason to hold real estate. They provide a good benefit but are icing on the cake as far as I am concerned.
If you have cash flowing properties you are paying taxes on that income, so I personally don't see a big tax advantage by owning real estate. In fact, just the opposite, in years where your maintenance and improvement expenses are low, you get hammered come tax time!!
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