Saturday, February 7, 2009

Tax Help for Real Estate Professionals and Investors

In today’s turbulent economy, the real estate market has taken a beating. With the downturn in the real estate market a lot of people have questions. Many of these questions are related to the tax implications of buying, selling or otherwise disposing of real estate.

Who do you turn to with your tax questions? You could turn to the Internet. While there is an abundant amount of information available, can you figure out how tax law applies to your specific situation? An alternative would be calling the IRS for assistance. Do you really want to wait on hold and hope you are getting the right answer?

Did you know…?

  • Landlords can greatly increase the depreciation deductions they receive the first few years they own rental property by using segmented depreciation.
  • Careful planning can permit you to deduct, in a single year, the cost of improvements to rental property that you would otherwise have to deduct over 27.5 years.
  • You can rent out a vacation home tax-free, in some cases.
  • Most small landlords can deduct up to $25,000 in rental property losses each year.
  • A special tax rule permits some landlords to deduct 100% of their rental property losses every year, no matter how much.
  • People who rent property to their family or friends can lose virtually all of their tax deductions.

The Tax Dude® helps real estate professionals and investors navigate the Internal Revenue Code. The Internal Revenue Code has more than one million words, is several pages long and in 2008, there were over 500 changes made to the code. That’s more than one per day! More than ever, you need the counsel of a qualified tax professional to decipher the Internal Revenue Code and apply it your unique financial situation.

The Tax Dude® has helped real estate professionals and investors with:

  • Maximizing deductible rental losses for Qualified Real Estate Professionals.
  • Questions related to the passive activity rules.
  • Tax implications of selling a residence which have been previously rented.
  • Tax implications of selling rental properties and depreciation recapture.
  • 1031 Like-kind exchanges.
  • Tax implications of short sales and foreclosures of residences.
  • Tax implications of short sales and foreclosures of investment properties.
  • Application of the first-time home buyer federal tax credit.
  • Cost segregation studies for rental properties.
  • Involuntary conversions and casualty losses.
  • Historic rehabilitative and low income housing tax credits.
  • Deductions for environmental clean-up costs and energy efficiency.
  • Qualified conservation easements.

If you have a real estate related tax question, please visit our new website If you are interested in become a full service client, please visit our regular website for more information about The Tax Dude®.

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