| Taxes are your biggest expense in your lifetime, so | | | | rental property into more real estate and defer paying |
| choose your source of income wisely! Real estate has | | | | taxes altogether. Your tax basis rolls into the next |
| some of the BEST TAX BREAKS of any investment | | | | property. The rules are rather stringent, in that the |
| in America! | | | | exchange must be completed with 180 days and the |
| The more you earn through your job, the more you | | | | exchange property must be indentified with 45 days |
| get taxed, and the system is setup that way to punish | | | | of the sale of the relinquished property (more info at |
| hard workers and reward investors. Have you looked | | | | Interest Deduction |
| at the bottom stub of your paycheck lately and seen | | | | You get to deduct interest you pay on debt you have |
| how much the government steals from you? Wage | | | | used to acquire your real estate. |
| income not only requires work, it gets taxed at a very | | | | Depreciation |
| high rate, plus the government takes FICA, which is put | | | | For rental properties, you get a tax deduction for the |
| into a system that may be bankrupt when you retire. | | | | "wear and tear" on the structure, even if the property |
| Body Text: Real estate has so many tax advantages | | | | increases in value! Thus, you can actually break even |
| over wage income: | | | | or make money, but on paper show a loss to offset |
| Capital Gains Rates | | | | other income. |
| The maximum federal tax rate on capital gains is 15%, | | | | No FICA Tax |
| whereas wage income is taxed at 35%. There's state | | | | Your income from real estate is general NOT subject |
| taxes, too, and some states offer further discounts on | | | | to FICA tax withholding. Regular self employment |
| capital gains income. Remember, capital gains requires | | | | income is subject to 15.3% tax on the first $97,000, and |
| that you hold a property for 12 months or more before | | | | thereafter your earned income is subject to medicare |
| selling and that it was held for productive use (i.e., as a | | | | withholding (which you may never get back in your |
| rental, no a long-term fix and flip). | | | | lifetime the way things are going!). |
| Exemption for Principal Residence | | | | It's not just what you make, it's what you keep... plan |
| If you sell your residence, the first $250,000 is exempt | | | | wisely where your income comes from, and you will |
| from gain or $500,000 if you are married. Remember, | | | | keep a lot more. |
| this requires that the residence was used as such for | | | | Click Here for more info for Reduce Taxes |
| two of the last five years. | | | | Written exclusively for by Attorney William Bronchick, |
| 1031 Exchanges | | | | Certified Registered Nationally-known attorney, Author, |
| Under IRC Sec 1031, you can roll your profits from a | | | | Entrepreneur and Speaker. |