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...]
Passive income and losses
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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...]
How to make your rental-property activity, tax deductible
Your rental property provides shelter for your tenants. And it can also provide a nice tax shelter for you if you know how to play your cards right. One great way to make sure your rental properties stay tax deductible is for you or your spouse to qualify as a “real-property trade or business.” What does that involve? Is it difficult to attain this status? We’ll … [Read more...]
Four ways to turn passive losses into deductions
Selling your rental property? If the answer is “yes,” I’ve good news for you. The IRS will now allow you to deduct all those losses you couldn’t deduct in past years. Uncle Sam calls those past, denied losses, “suspended losses.” And to make sure that you can now claim all your formerly suspended tax deductions, you need to avoid the hidden traps the IRS has set for … [Read more...]