Can I deduct Life or Health Insurance Payments on my Taxes?
If you own rental property, you may be able to deduct life and health insurance payments on your taxes.

What?
Costs to insure rental property are deductible...

Huh?
Depending on how you structure your rental business, you may be able to cover your life and medical insurance as part of the rental business...

Okay...
Structuring your rental property business as a Limited Liability Company (LLC) may permit you to deduct these costs for you and your family...

Right...
You may want to refer to IRS Publication 535 to learn more about business expenses. Be sure to consult with a tax advisor to consider your specific circumstances.

To learn more about how to take control of your Real Estate Investments and Taxes, check out RealTaxTips at TReXGlobal.com.


Niman @TReXGlobal.com
 
TReXGlobal.com The Best Way to Market to Real Estate Investors!

The Inman Conference in San Francisco was a wonderful event. One of the greatest things was being able to interact with other fellow ActiveRainers in person (Mike Mueller,  Tina Merrit, and Mara Hawk just to name a few, but that's another story).

I'd like to take this opportunity to introduce the service we shared at Inman. So far, everyone from ActiveRain loves the idea, so I thought it would be good to share. My company (TReXGlobal.com) has a FREE Real Estate Partner Program to help you double your business by co-branding our free web tools for investors. You will get a unique link that you can put on your website to convert your web visitors into leads. Your business will increase as you help your clients save thousands of dollars. The best part: it's free for you and your clients!

What You Get: What Clients Get:
  • Unique Link that you can distribute
  • T-ReX Web Tools Co-Branded byYOU
  • An Easy Way to Serve Your Clients
  • SuperHero Status with Investors
  • YOUR Co-Branded Web Tool
  • FREE Property Management Software
  •  Confidence in Your Ability to Serve their Needs
  • Easy Way to Save Time and Money
It will take you 5 minutes, and then you're DONE!
Your Co-Branded Application

Here's How it Works:

  • Create a Simplify'em Partner Account
  • Personalize Your Co-Branded WebTool
  • Share your Link

(Whenever someone signs up using your link, contact information for your lead will be emailed to you)

What's in it for you? You can provide a valuable service to help your investors save, at no cost to you or your clients, and you get all the credit! Isn't that a great way to increase business with your prospects?

Learn More


 
No Loss Limit for Real Estate Professionals and Spouses?

Real Estate Investors qualify as "real estate professionals" if they spend at least 750 hours per year on their investment activities. A real estate sales license is not required and either spouse can qualify. Real estate brokers, realty sales agents, property managers, builders, contractors and leasing agents are all considered real estate professionals if they spent 750 hours on real estate business.

For Example:
Say your Adjusted Gross Income (AGI) is $160,000, and as a result, you are not entitled to any rental investment loss deductions because your AGI exceeds $150,000.
However, if your spouse manages your real estate properties and spends more than 750 hours annually supervising the properties, making management decisions, inspecting properties, and supervising property sales and exchanges, then your spouse qualifies as a "real estate professional".
Ride the Loss!

The result is that you and your spouse can claim unlimited property loss deductions from your properties because one of you qualifies as a "real estate professional."

To learn how to take control of your Real Estate and Taxes, check out RealTaxTips at TReXGlobal.com.

 
Is it Better to Use Actual Expenses or the Standard Rate?
You can deduct vehicle costs on your taxes using actual vehicle expenses or the standard mileage rate.
Actual Expenses: Standard Rate:
-Collect Receipts
-Write-Off Expenses that are Deductible
-Log Mileage
-Deduct using Standard Mileage rate

The STANDARD RATE may be more beneficial for individuals who have a lot of mileage and low vehicle costs. Using the ACTUAL EXPENSE method is only better when your vehicle costs are very high.

The standard mileage rate is used to figure the deductible cost of a vehicle that is owned or leased. For Tax Year 2008, the IRS is allowing taxpayers to deduct 50.5 cents per mile driven for the first 6 months of 2008, and 58.5 cents per mile driven for the final six months.

FOR EXAMPLE
A person who spent $10,000 on gas but only traveled 10,000 business miles would want to use the Actual Expense Method because it can yield a larger deduction than the Standard Mileage Rate.
Actual Expense Method Standard Mileage Rate
$10K deduction for gas expense $5.85K standard deduction (10K * 58.5 Cents)
Use the Method that is most Advantageous!!!
A person who spent $5,000 on gas and traveled 20,000 business miles might benefit more from the standard mileage deduction.
Actual Expense Method Standard Mileage Rate
$5K deduction for gas expense $11.7K standard deduction (20K * 58.5 Cents)
Pay attention to specific rules about listed property, depreciation limits (which change often), and switching accounting methods. Whether using the standard mileage or actual expense deduction, be sure to track mileage and expenses related to your rental activity. You usually won't know which method to use until the end of the tax year, so it's best to just keep a good record of all vehicle activities.
RealTaxTips.com To learn how to take control of your Real Estate and Taxes, check out RealTaxTips at TReXGlobal.com.
 
Is it Better to Give a Gift or Entertain???
Most expenses are deductible as long as they are ordinary and necessary for your business. You can deduct up to 50% of entertainment costs, or gift costs up to $25 each.
Entertainment: Gifts:

Deduct up to 50%

Deduct up to $25
To Gift, or Not to Gift...
Generally, an item that is considered a gift is also considered to be an entertainment expense.

If you give an item that is intended to be used at a later date (like tickets to a performance or event), it is usually considered a gift.

Sometimes you will have the option of deducting those costs as a gift or entertainment expense, depending on the circumstances.
FOR EXAMPLE
If You Go With Them If You DON'T Go With Them
Treat the cost as an entertainment expense, do not deduct as a gift expense. Treat the cost as a gift or entertainment expense, whichever is more advantageous.
Use the Method that is most Advantageous!!!
If Raiders Tickets cost $40 If the tickets cost $40, you'd rather treat it as a gift cost so you could deduct $25. If you deducted it as an entertainment expense, you could only deduct $20.
If Raiders Tickets cost $100 If the tickets cost $100, you'd rather treat it as an entertainment expense so you can deduct $50. If you deducted it as a gift cost, you could only deduct $25.
RealTaxTips.com To read more tips about Real Estate and Taxes, check out RealTaxTips at TReXGlobal.com.
 
Ever Considered Selling Property To Yourself???
Selling property to your own S-Corporation can be beneficial in TWO specific situations. To Sell, or Not to Sell...
1.) You do not meet the requirements for excluding capital gains on the sale of your primary home

2.) You can not take advantage of depreciation on appreciated property

By selling to S-Corp, you can:

For Example:
You lived in a property for 3 years, and rented it out for the next 7 years. Since you haven't lived there for 2 of the last 5 years, you cannot sell the property as a primary residence and avoid the capital gain.
However, after moving out of the property, you sold it to your own S-Corporation, which allowed you to exclude capital gain because requirements for the primary residence two-year rule were met.

Take Advantage of the 2-Year Rule

The other advantage is:

For Example:
You purchased a home for $50k many years ago, and it is worth $500k now. If you decided to just rent it out, the basis for depreciation would be the original basis of $50k.
But, after selling it to your S-Corporation and then renting it out, you can depreciate the new basis of $500k.

new basis on the appreciated property

Clearly this will bring you substantial tax savings....

Save on Taxes

But be careful!
Selling to your S-Corp isn't for everyone!!!

Avoid this strategy if:

For Example:
You sell your primary residence with a gain of $240k to your S-Corp, and pay no tax due to the exclusion.
However, if you could not meet the exclusion, the $240k gain would be taxed at ordinary income tax rates... it would have been more beneficial to just sell the property and pay capital gains tax of 15% instead.

you cannot take advantage of the exclusion amount

RealTaxTips.com To learn more about how to take control of your real estate investments, check out RealTaxTips at TReXGlobal.com.
 
You should hire someone (like a family member) to do your work and write off the cost of labor, since you cannot deduct the cost of your own labor.
For Example: if you paint your rental property or install a lock using your own labor instead of hiring a painter or a locksmith, you cannot deduct any expenses for labor.
SO YOU SHOULD HIRE A FAMILY MEMBER!!!
If you hire a non-owner (like your child or possibly your spouse), the costs are deductible against your income because they are considered to be business expenses.

There's no catch and it's A-OK with the IRS. You will have more control over lowering your expenses while still keeping the ability to write them off.
To learn more about how to take control of your real estate investments, check out RealTaxTips at TReXGlobal.com.

RealTaxTips.com

Niman Singh
 
Have you ever had to deal with a CASUALTY LOSS?

Here's why I ask:

Losses incurred because of a casualty, disaster, or theft can be tax-deductible.

These losses may be limited, but they are certainly deductible.
For Example: Your tenant runs their car through the garage door
Even though you haven’t replaced the garage door, and don’t have any expenses to write off because you didn’t fix anything, you can deduct the cost of damages incurred as a casualty expense.
The loss you claim will be reduced by any reimbursements you receive (like insurance).
To claim a casualty loss, you must full out IRS Form 4684.
To learn more about how to save money and lower taxes using real estate investments, check out these resources.

RealTaxTips.com

Niman Singh
 
Summer is coming around, I'm starting to plan my next vacation...

...and I am going to share a little secret.

You might have tried all the tricks in the book, but I'm sure you haven't tried making your VACATION TAX DEDUCTIBLE.



For example, you fly with your spouse
(aka your business partner) to Orlando to scout and purchase a rental condominium.

Since this is a business trip, you can deduct the cost of all business expenses, like travel, lodging, and services.
Ordinary and necessary expenses are tax deductible, and that's why you can deduct the cost of expenses incurred while looking for new property.


It wouldn't matter if you spent some time walking on the beach or even if you made a stop at Disney World, just as long as more than half the time you spent away on travel was spent doing business; and the primary cause for travel was business.
Obviously you can't just write off your hotel and travel to Disney World just because you're thinking about buying Cinderella's Castle. Be sure to consult with a professional.
To learn about all the different ways to take advantage of real estate investments, visit our sites.

RealTaxTips.com

Niman Singh
 
Many people get confused about how to treat points, so I hope this post is helpful. In this blog, I am focusing particularly on what to do when the Points are Paid by the Buyer. For Points Pre-Paid by the Seller, read my previous blog...

A point is interest that has been pre-paid in an effort to "buy down" the fixed interest imposed on a mortgage.

In a property SALE (not refinance), if Points are Paid by the Buyer:

If you are the BUYER:

For Personal Property

For Rental Property

Deduct all points as mortgage interest on Schedule A Deduct points over the life of the loan on Schedule E

Keep in mind, this post is regarding points paid on the sale of property. Points paid during a refinance are treated differently. As always, consult with a tax advisor to be on the safe side.

To learn more about all the different ways to save money on real estate investments, visit our sites.

RealTaxTips.com

Niman Singh
 
 
Real Estate Media: Niman @TReXGlobal.com (TReXGlobal.com)
Niman @TReXGlobal.com
Fremont, CA
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