What are tax benefits

[Dev Patel]

What is the definition of tax benefits and what are some types. What do tax benefits help with and what are they good for in real estate investing. 

[Bonnie Griffin Kaake]

One of the best tax benefits of real estate investing is the up-front cash flow available to you by doing a quality cost segregation study. Make sure it is an engineering-based study which is the IRS' preferred methodology. No one I know likes the brain damage and cost of getting audited. A good study will give you about 6% to 8% of your property's purchase price in up-front cash flow...taxes you don't have to pay for as long as you own the property. Therefore, doesn't it make sense to reinvest that for better returns than letting it sit with the US Treasury? 

You can also do a 1031 exchange when you decide to sell the property and again, postpone both capital gains and recapture.