If you own rental properties, you don’t want the IRS to classify them as an “investment.”
Nope. You want those properties to qualify as a “trade” or “business.”
Why? Because if your properties are treated as such, and reported on Schedule E, you can enjoy from some major tax breaks.
You’ll get the whole story when you read my article titled Tax Tips: Are Your Rental Properties a Business? If So, You Win!
Four benefits you get from running
a rental property business.
Benefit #1: You get tax-favored 1231 treatment. Property that qualifies for Section 1231 treatment gives you the best of both worlds: ordinary losses and long-term capital gains! We’ll give you all the details when you read the full article.
Benefit #2: You can take a profitable home-office deduction. The law states that you can claim a home-office deduction for trade or business activities only. If you’re owning property as an investment, you won’t be eligible for this money-saving deduction. Want to learn more? Read the full article.
Benefit #3: You can deduct the cost of investment seminars, meetings, and conventions. The IRS doesn’t grant deductions for travel or other costs of attending a convention, seminar, or similar meeting unless the activity relates to a trade or business of the taxpayer. All will be explained when you read the full article.
Benefit #4: You’re entitled to Section 179 expensing. This is a real plus but you’ll have to pay attention to three important rules. We’ll tell you what they are when you read the full article.
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