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Archive for the 'Taxes' Category


Top Ten Tax Deductions for Real Estate Investors

I wanted to take the time to write about the top ten tax deductions available for real estate investors.  Though some of this may seem relatively elementary, I’ve included a few gold nuggets for even our most experienced clients.

Real estate investors are always asking what expenses landlords can deduct.  Because the answer to that question can quite literally be endless, we often tell our clients to record everything.  For those expenses that our clients are unsure about, we ask them to create an “ask my accountant” category or account in their bookkeeping solution which they can discuss during a short call.

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The Real Estate Professional Tax Loophole

Real-Estate-Tax-Loopholes

The Real Estate Professional status is a designation given by the IRS based on the number of hours that you work in real estate activities versus other activities.

It doesn’t mean that you have to become a real estate sales agent or broker.  You don’t need to drive around showing people houses or putting out “for sale” signs.

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3 Business Structure Mistakes Real Estate Investors Make

Let’s start with: Why have an LLC?

There are mainly two reasons why you want any kind of business structure:

Pay less tax, and protect your assets.

Before you jump into creating your LLCs for your real estate holdings, there are a few things to consider.  Do NOT make these three mistakes.

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Understanding the Checkbook IRA and Its Benefits

When it comes to retirement savings, we all do wish for the same amount of investment freedom that we usually get with our other investments.  Traditionally, most of the financial institutions offer limited investment options, starting with stocks and bonds to mutual funds and CDs only.

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1031 Exchange Rules Every Real Estate Investor Should Know

Taxes rarely make for exciting reading material, but if you own an investment property, there’s at least one set of IRS regulations you absolutely will want to understand: 1031 exchange rules. Why? Because normally when you sell an investment property for more than what you paid for it, you’d have to pay a hefty capital gains tax.

But with a 1031 exchange, you get to defer paying those taxes if you reinvest the proceeds in a new property, making an “exchange” rather than a sale. It’s just that this transaction is subject to some strict regulations, so you’ll need to follow the 1031 exchange rules to the letter.

Here’s what you need to know to pull it off.

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How to Boost Your Real Estate Returns with a Self-Directed IRA

Robert Kiyosaki coined a timeless piece of wisdom in the form of this quote:

“Most people fail to realize that in life, it’s not how much money you make, it’s how much money you keep.” ~ Robert Kiyosaki

It is quite often the case when people make a lot of money but find it difficult to keep it with them.  Taxes, inflation, market movements, and mismanaged investments are among some of the common culprits.

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Would You Move for $1 Million in New Wealth?

America is a nation on the move.  The Census Bureau says 35.9 million of us picked-up and went somewhere else in 2013, almost 12% of the entire population.

We move because of such things as jobs, climate, family and schools but there’s another reason as well: A good move can be worth $1 million and maybe more.

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Understanding Land Trusts (Part 4)

This article is Part 4 of a four-part series on Land Trusts.  You can find Part 1 here: Understanding Land Trusts

In the previous installment of the Understanding Land Trusts series, we discussed the Due-on-Sale Clause and how the land trust benefits you.  In this part we will discuss various strategies to keep your land trust involvement private.

Constructing a Land Trust for Privacy
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The Risk of Not Investing

Before I break down the risks of investing, one of the most important things you need to look at is; what is the risk of not investing?

Whether in businesses, real estate, stocks or mutual funds – what’s the risk of not investing your cash?

What is the risk of just putting it under the mattress and saving your money, or putting it into a bank account that makes a tiny interest rate every month – what are those risks?

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Due-on-Sale Clause – Understanding Land Trusts

This article is Part 3 of a four-part series on Land Trusts.  You can find Part 1 here: Understanding Land Trusts

Now you may be asking — how is the land trust going to help me with my lender?

The answer lies in why the land trust was created, and why it’s perfectly legal. It’s basically a compromise between two opposing forces.  On one side is the bank which is interested in generating income from loans and at the same time protecting itself through a security interest in real property — on the other side is the borrower (real property owner) who desires to transfer title to his property without fear of foreclosure or forced refinancing.  The bank acts as the protagonist by incorporating a “due-on-sale clause” into most, if not all, mortgages its writes.

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5 Wealth Building Tips

With one month down in 2014, how are you doing with achieving your wealth goals for the year?  If you aren’t where you want to be, keep these tips in mind.

TIP #1: Good Investments Aren’t Good Enough
Are you winging it in your wealth strategy?  In other words, are you taking action without a strategy to support the action?

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End of Year Tax Considerations

While tax returns aren’t due until April, to minimize your tax burden the strategy of accelerating rental property expenses should be considered now, according to Larry Nelson, CPA and partner at Kerkock Katter & Nelson LLP.  With twenty years of experience assisting rental property owners, Nelson suggests that deducting these expenses this year could be more important than ever, especially if you’re affected by the new Affordable Healthcare Act tax.

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Top Ten Tax Deductions for Landlords

No landlord would pay more than necessary for utilities or other operating expenses for a rental property. Yet millions of landlords pay more taxes on their rental income than they have to. Why?

Rental real estate provides more tax benefits than almost any other investment.

Every year, millions of landlords pay more taxes on their rental income than they have to.  Why?  Because they fail to take advantage of all the tax deductions available for owners of rental property. Investment real estate provides more tax benefits than almost any other investment.

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Why Investors Use Land Trusts

This article is Part 2 of a four-part series on Land Trusts.  You can find Part 1 here: Understanding Land Trusts

Investors, attorneys, or CPAs unfamiliar with the use of land trusts often ask me “why would someone consider using a land trust?” My general response is “why not.” When it comes to entity structuring many people prefer to being with the complex rather than the simple. The land trust, contrary to the multiple internet gurus or guest REIA speakers that sing the vestibule of virtues offered by this rudimentary of tools, is simply and nothing more than a title holding vehicle with some interesting attributes. From a legal standpoint, the land trust is a type of “grantor trust” (this is the phrase you should use in states that don’t formally recognize land trusts via statute).

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Why You Should Be Investing Your Cash in Real Estate

Monopoly-ChanceAs entrepreneurs find success with their primary business ventures, many search for the right investments for their profits.

Of course, we can and should all start traditional tax preferred vehicles like an IRA and 401k. These are the bedrock of good ‘benefit’ planning for ourselves and our employees. I’m also convinced more entrepreneurs should consider rental real estate as an important part of their portfolio.

I realize many business owners shrug off this concept after the recent downturn in real estate values, but let me list a few reasons that may change your mind:

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