Year-Round Tax Planning
Friday, October 23
Why tax planning should not start in April Most real estate investors think about taxes once a year, in April. That approach leaves money on the table, because the real savings happen before a transaction closes, not after. Once you have bought the property, started the business, or taken the tr...
K-1 Self-Employment Tax
Friday, October 02
Does Your K-1 Really Escape Self-Employment Tax? Many real estate investors assume that checking the “limited partner” box on a K-1 means their share of partnership income automatically avoids self-employment tax. A recent federal appeals court decision is a reminder that the label alone does not...
Section 1250 Recapture
Saturday, September 19
A rental sale can create a bigger tax bill than many investors expect. It's easy to assume that all of your profit will receive the normal long-term capital gains rate of around 20%. But depreciation creates a separate layer. The part of your gain tied to depreciation previously taken on the buil...
Documenting Material Participation
Saturday, September 12
If you’re using a short-term rental tax strategy, qualifying for the tax treatment is only part of the job. You also need records that can support what you claimed if the IRS asks questions later. Without convincing documentation of your participation, a loss you treated as non-passive could be r...
Cash-Out Refinance Tax Implications
Saturday, August 29
A cash-out refinance can give real estate investors access to the equity in a rental property without having to sell it. You replace the current mortgage with a larger loan and receive the extra amount in cash. Since that money has to be repaid, the refinance proceeds themselves generally aren’t ...
Timing a Syndication Investment to Offset Passive Income
Saturday, August 22
If you invest in real estate syndications, the timing of when you enter a deal can matter almost as much as the deal itself. Here is the situation we help investors think through. Say you are a limited partner in a syndication that had a strong year and is passing through taxable passive income...