Becoming a Landlord: The Basics – 3 Important Tips
Buying your first property? Here are three important tips to get you off to a great start!Read More
Author: Terry, CPA @ Kabinet
Throughout the Internal Revenue Code there are major benefits for real estate investing and homeownership. These benefits are there for everyone, not just Donald Trump and if you use them, they will make your portfolio so much more lucrative.
The first we will look at is Capital Gains Tax Rates. Real Estate assets owned by an investor are considered capital assets and upon sale they are taxed favorably.
Ordinary income rates can go as high as 37% and an added 3.8 % on passive income. The sale of a real estate investment for an investor is taxed at a flat 20% rate. The savings between ordinary income tax and capital gains tax is astronomical!
It truly is a no brainer to invest in real estate. Through my decades of public accounting, I cannot stress enough the benefit of keeping accurate property records for tax purposes. Beyond tax purposes, accurate recording keeping allows you as the investor to have intimate knowledge of your actual costs and eventually profits on your investment properties.
You would be shocked to know how many tax dollars are lost to deficient records, or simply, lack of records. To keep something in an old paper folder is one thing, but to have your documents accessible at a moment’s notice to be utilized throughout the year is a whole different level of business development. To save thousands of dollars in taxes plus gigantic savings in accounting fees, all for the price of $49.99, to me is a no brainer.
Terry is the CFO of Kabinet and a Certified Public Accountant with more than three decades working in the field and an observer of human nature. This as a series of personal experiences which led him to Kabinet and why he considers it a tremendous product that has a most useful function for all who own real estate.