why real estate investments?
1. Gains are deferrable
8 Real Estate Tax Advantages of an Investment Property
An income property can range from commercial or developed for the purpose of earning profit through renting, leasing, or price appreciation.
As a landlord, here are 8 property tax deductions that can be accompanied with these types of real estate investments:
1 – Depreciation (non-cash expense) deduction from income. This real estate tax deduction is based on the perceived decrease in the value of the real estate.
2 – Mortgage interest tax deductions from income. A mortgage interest tax deduction is the interest you took for your mortgage loan and this real estate tax deduction is usually your biggest one. Also, remember to deduct your mortgage insurance premium if you took one out.
3 – Deferral of capital gains via 1031 exchange
4 – Cost of repairs, maintenance, and upkeep
5 – Cost of services (rental property management & legal consultation or services)
6 – Utilities
7 – Travel costs associated with the property (checking on the property, inspection, repairs, etcetera). You can even deduct real estate taxes for the gas you used on your rental property visits.
8 – Property tax deductions
When you add up all the deductions you can save on real estate taxes, there doesn’t seem to be a better tax heaven than real estate. Many real estate investors are positioned in a more favorable tax position.