Recently Julio Gonzalez, Founder and CEO of Engineered Tax Services, wrote a comprehensive two-part series of articles about the art of the real estate tax deduction that was published by Tax Practice News. Both parts cover tax tools and strategies for real estate owners and investors to maximize their deductions.
Julio shares his secrets collected over 20-plus years of helping real estate professionals reduce their taxes, boost their cash flow, and strengthen their financial position. As he declares in the opening:
“How can you use real estate to build wealth? Most people don’t know it, but owning real estate can be a major step forward in creating and maintaining your personal wealth. You only have to know how to master the art of the real estate deduction. As an accountant, I’ve spent over 20 years involved in commercial real estate, and I have several valuable ideas I’d like to share with you.”
Want to learn more? Part One covers:
- Writing off Your Depreciation
- The Power of Cost Segregation –
Did you know? “If you own a property with a class life of 27 years, you sometimes get a sizeable bonus depreciation in year one. Bonus depreciation is allowable on any class life equal to or less than 20 years. As a result, by reallocating some of the building’s assets to a five- or 15-year lifespan, they would qualify for bonus depreciation. The 2017 Tax Cuts and Jobs Act allows for you to take an immediate deduction for the full costs in the first year. Think of it like an advance on a paycheck. Instead of waiting five or 15 years for the depreciation, you can take it all in year one.”
- Passive vs. Non-Passive Rule
Part Two of “The Art of the Real Estate Tax Deduction” covers:
- Basis Issues
- At-Risk Rules
- Excess Business Loss
- The Benefits of Real Estate Deductions –
Did you know? “It almost sounds too good to be true—but it is. If you buy a property for $100,000, put down $10,000, get back $30,000 in bonus depreciation, and then collect rental fees on the property, the government is essentially buying that property for you. You get your $10,000 back, and your financial benefit is in excess of your outlay.”
Both Part 1 and Part 2 were originally published by Tax Practice News. Below you will find a link to both parts of this informative two-part series every real estate investor should read!