Attention property owners! This year only, the IRS will let you take extra deductions for certain renovations you made to your business or rental property in prior years! That’s right. The new law gifts you retroactive tax benefits (also known as cash)! EXAMPLE: Say you made major repairs on your property some years ago at a cost of $50,000. Thanks to the new rules, the IRS … [Read more...]
Passive income and losses
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How to qualify for deductions on rental-property losses
Do you co-own or co-manage a business or investment with your spouse? If you do, the tax law can help you out. Big time. You see, there are special IRS rules that allow you and your spouse to beat the IRS limits on deducting the net losses of your rental property, business, or investment. And this can amount to a lot of money! If you want to learn how joint filers can … [Read more...]
Great news from the IRS for rental-property owners
It’s true. The IRS actually does have great news for you! You see, Uncle Sam has just decided to help out rental-property owners who’ve used the rental property as their principal residence. Here’s the story in a nut shell… Thanks to the latest IRS advice, when you sell your rental property you could end up with a negative total tax on the sale. Getting this “negative” tax … [Read more...]
How to survive an IRS rental properties audit
I recently heard from a reader of the Tax Reduction Letter asking for advice. It seems that an IRS auditor had examined the couple’s three rental properties, disallowed their losses, and told them to expect a tax bill for $55,000! My reader asked if there was anything he and his wife could do to successfully challenge the IRS ruling and avoid paying the $55,000. It turned … [Read more...]
Is your real estate activity a “business” or are you an “investor”?
How do you structure your real estate activities? Are you running a business or simply investing in properties? The answer can have big tax consequences! EXAMPLE: If you want to take a trip to a real estate seminar you may be able to deduct all the related expenses… or maybe not. It all depends on how you’ve structured your activities. Which is why you need more … [Read more...]