Tax advantages for buying in cash

Member since 2020 · 12 posts · 0 votes

Quick Question: If I buy a house with cash; Am I able to write that purchase off on my taxes. I understand that each situation is different BUT I'm just wondering if that is something that is possible. Thank you

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Mark Perlberg

CPA · Charlotte, NC · Member since 2016 · 37 posts · 16 votes

Unfortunately not. Buying through cash or leverage has no impact on the tax treatment. You'll likely capitalize and depreciate the property over 27 or 39 years.

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Mark Perlberg
CPA · Charlotte, NC · Member since 2016 · 37 posts · 16 votes
3y
Unfortunately not. Buying through cash or leverage has no impact on the tax treatment. You'll likely capitalize and depreciate the property over 27 or 39 years.
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Basit SiddiqiBusiness Member
Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
3y
Have a conversation with your accountant to see if a cost segregation will help you accelerate more depreciation in year one.

Whether the added depreciation will help you on your return is another conversation to have with your accountant.

Best of luck.
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William Powell
Member since 2023 · 122 posts · 68 votes
3y
Not like you think. The cash you spent will be broken down using the depreciation schedule. Any repairs can be written off as an expense but not the purchase price. If you're holding the house and renting it, you depreciate purchase amount. If you're flipping it then purchase and rehab costs become an expense. A capital expense. If you are playing long game your expense is stretched out of 27 years or whatever you and your tax pro choose. Not financial advice :)
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Account Closed
Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
3y
Quote from @David Coffee:

Quick Question: If I buy a house with cash; Am I able to write that purchase off on my taxes. I understand that each situation is different BUT I'm just wondering if that is something that is possible. Thank you

Though this isn't a direct answer, there are other things to consider.
What buying with cash provides is speed of transaction, a free & clear property, flexibility, and some money savings.

When you borrow money to buy a house, you pay origination fees, underwriting, appraisal and other fees. You are subject to underwriting's approval which may nix the deal. So, that can become opportunity cost.

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