Stacy Eder wants you to be aware that investing in real estate may bring certain tax benefits.
According to Robert Bruss, who writes articles for Inman News on the Web (www.inman.com), investment real estate offers significant tax benefits both during ownership and at the time of resale or a tax-deferred exchange. He writes: “Not only do most investment properties appreciate in market value, but they also produce significant tax savings.”
In one article, Bruss got more detailed: “To enjoy maximum tax benefits, realty investors who materially participate in owning and managing their properties must own at least a 10 percent interest in the property. This leaves out investors in large partnerships and other group investments such as REITs (real estate investment trusts)…”
According to Bruss, if you meet those two tests (owning AND managing), you may be able to deduct up to $25,000 of any investment property losses against taxable income—as long as your adjusted gross income is lower than $100,000.
There are numerous other tax considerations, including depreciation and the best time to use or defer deductions.
So, if you are a newcomer to real-estate investments, remember it’s wise to check with an expert—an accountant or attorney who is familiar with real-estate tax law before you proceed.
You can find lots more information about real-estate investing at www.inman.com.
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