About the author:

Terry I. Weberman, The Kabinet CPA

Terry is a Certified Public Accountant in the New York Metro area with experience working with businesses and individuals across all backgrounds. He writes articles for the Kabinet blog and is here to help you on your home ownership and/or investing journey. Ask Terry a question by sending an email to info@kabinet.com and put “Terry CPA” in the subject line. This is a complimentary service as part of Kabinet’s commitment to you!

A little man figurine sitting on English money

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.

For more information, feel free to contact me at info@kabinet.com it is gratis.

Note

Terry, The Kabinet CPA, has made every effort to ensure the accuracy of the information within this article was correct at time of publication. He does not assume and hereby disclaims any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result from accident, negligence, or any other cause. Speak to your advisor to make sure you qualify for such benefits or opportunities. Do not rely solely on this abbreviated article, it is for informational purposes only.