Investors
Services we offer:
 | 1031 Tax Deferred Exchanges | |
| Tenants-In-Common (TIC) | |
| Apartment Buildings +5 or more | |
| Multi-families 2-4 | |
| Land | |
| Rental Property | |
| Office Buildings | |
| Malls - Plazas | |
| GET MORE INFO |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| TRINITY Real Estate & Financial Services |
| "Unlocking your future" |
Tax Talk by George Saenz • Bankrate.com
For most folks at your level of income, a loss from rental property would not be a big benefit income tax-wise. Losses from rental activities for most
individuals are not allowed to offset other income such as wages if their adjusted gross income exceeds $150,000. A significant exception exists for
a real estate professional such as you.
In figuring your profit from the property, you're allowed a deduction of your cost at roughly 4 percent per year. On a $200,000 property this means you
have an approximate $8,000 tax deduction that does not come out of your pocket.
The other side of the coin is that although you're losing for tax purposes, your property is usually appreciating in value annually. This appreciation is
not taxed until you sell the property and you can defer the tax even then by doing a like-kind exchange. In addition, as the property appreciates, you
can borrow against it tax-free and buy more property.
While most people can't use the tax deduction due to passive activity limitations when their income exceeds $150,000 (see Internal Revenue Service
Publication 925), a significant exception exists for a real estate professional. A real estate professional is generally a developer, property manager or
broker. If you're in this category, your losses would not be limited under the passive activity rules.
For most folks at your level of income, a loss from rental property would not be a big benefit income tax-wise. Losses from rental activities for most
individuals are not allowed to offset other income such as wages if their adjusted gross income exceeds $150,000. A significant exception exists for
a real estate professional such as you.
In figuring your profit from the property, you're allowed a deduction of your cost at roughly 4 percent per year. On a $200,000 property this means you
have an approximate $8,000 tax deduction that does not come out of your pocket.
The other side of the coin is that although you're losing for tax purposes, your property is usually appreciating in value annually. This appreciation is
not taxed until you sell the property and you can defer the tax even then by doing a like-kind exchange. In addition, as the property appreciates, you
can borrow against it tax-free and buy more property.
While most people can't use the tax deduction due to passive activity limitations when their income exceeds $150,000 (see Internal Revenue Service
Publication 925), a significant exception exists for a real estate professional. A real estate professional is generally a developer, property manager or
broker. If you're in this category, your losses would not be limited under the passive activity rules.
Tax savings from rental property losses
| INVEST IN NORTH CAROLINA REAL ESTATE |
| "Interested in reducing taxes, adding to your retirement income, paying off bills, staying one step ahead of inflation through property appreciation?" Unlock your future today! Call us! |
| 336.538.9799 sales@TrinityREFServices.com |
| POSSIBILITIES |
| ARE |
| ENDLESS! |
| © 2007-2008 TRINITY Realty, REALTORS. All rights reserved. An Equal Housing Opportunity. Privately Owned and Operated. |
Web Designer: OurCommunitySource.com