The Tax Cuts and Jobs Act (TCJA) tax reform added new tax code Section 199A, which created a 20 percent tax deduction possibility for you if your rental property: (a) has profits and (b) can qualify as a trade or business. The current tax law as now stands, with rentals that achieve trade or business status, you win. When you achieve the “business-status” rental property, it will create the following five possible tax benefits for...
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The good news is that you can be both real estate investor and real estate dealer with respect to your real estate portfolio. The next good news is that you are in control, and by knowing just a few rules about dealer and investor classifications, you can do much to increase your net worth. Both Disadvantages of Being a Real Estate Dealer Profits on dealer sales are generally subject to taxes at both ordinary income rates of up to 37...
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The recent tax reform, known as the Tax Cuts and Jobs Act (TCJA), added some good benefits to your real estate rentals, both commercial and residential. Notably, your qualified business income from your real estate rentals creates a possible 20 percent tax deduction with no effort on your part. And if you want less taxable income, the TCJA gives you enhanced bonus depreciation and new avenues for Section 179 expensing. ...
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The first good news is that you can be both real estate investor and real estate dealer with respect to your real estate portfolio. The next good news is that you are in control, and by knowing just a few rules about dealer and investor classifications, you can do much to increase your net worth. Let’s take a quick look at how big a difference you can make in the tax bite. Say you have a $90,000 profit on the sale of a property. •...
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In December of 2017, the Tax Cuts and Jobs Act further extended the benefits of investing in real estate by introducing a new “qualified business income” (QBI) deduction under IRC Section 199A that further reduces net rental real estate income by up to 20%. We have received some inquiries about the impact of the new Section 199A on real estate properties with triple-net leases. Since the inception of Section 199A, experts have...
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