As you may know by now (and you’ll certainly know if you’re a regular reader of the Tax Reduction Letter), the new tax code Section 199A can give you a fat deduction of up to 20-percent of your taxable income reduced by net capital gains. The problem was, until recently, the IRS never provided a definitive definition of “net capital gains.” Well, the fog has lifted and … [Read more...]
Rental Properties
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For 199A Tax Deductions, Must Landlords Give 1099s to Vendors?
It’s a fact… The Tax Cuts and Jobs Act gives you a possible 20-percent tax deduction on your rental property. But that’s only if your rental property is a trade or business, and that comes with its own burdens! For example, Section 199A final regulations stipulate that under tax code Section 6041, a trade or business must issue 1099s to certain vendors. So in … [Read more...]
Defining “real estate investor” and “real estate dealer”
Here’s a good news double header… Good news #1: You can be both a real estate investor and a real estate dealer with respect to your real estate portfolio. This puts you where you want to be. In control. Good news #2: By knowing just a few rules about dealer/investor classifications, you can dramatically increase your net worth. Want to find out more? Read my new article … [Read more...]
Tax reform hammers personal casualty loss deductions
Hurricanes. Floods. Wildfires. These and other disasters have sadly cost many lives and billions of dollars in property damage. If you have suffered property damage, we want to warn you that the Tax Cuts and Jobs Act placed a new limit on personal casualty loss deductions for the years 2018 to 2025. The changes in the law can have a huge impact on your ability to deduct … [Read more...]
Do triple-net leases qualify for a 199A deduction?
Let’s start with a definition… A triple-net lease requires the lessee to pay the landlord rent and take care of real estate taxes, building maintenance, and property-management costs. If you use triple-net leases for your rental properties, you may be wondering if you’re eligible for the valuable Section 199A 20-percent deduction. Our answer is an absolutely definite … [Read more...]