Do you own property that you rent out or live? If that is the case, then are you aware that every year, millions of property owners end up paying more taxes on their rental income than they are supposed to? Why, because they fail to take advantage of those tax benefits. But, first, there is need to acknowledge the fact that the rental property has more tax benefits than any other investment you would think of.
To begin with, you need to participate in commercial real estate syndication, which will enable you to take full advantage of the investment tax benefit. There are numerous tax deductions available for owners of rental properties. However, for you to enjoy all the benefits it is important to ensure that you are an investor who has all the tax features related with the authentic ownership of the property. For that reason, a limited liability company (LLC) structure is more attractive when compared to other real estate investment trusts. This is because investment trusts such as (REITs) are incapable of taking the full advantage of a number of tax shelter benefits that are offered through the LP or LLC structure. For instance, depreciation deduction and associated interest expense.
By now, you must have known that you can deduct mortgage interest and taxes on rental properties. LPs or LLCs structures are appealing in the essence that the main feature for investing in rental estates is the depreciation deduction. It creates a tax shelter for a rental property that is well located and has a good maintenance services because it tends to have an advantageous life, which is usually longer when compared to the depreciation recovery duration permitted by law. Then again, another advantage of using LPs or LLCs structures is the provision for deducting associated interest expense of rental properties that were acquired using mortgage services or other financing, from the rental income of the property in question in order to calculate the applicable entity’s taxable income. Take advantages of these structures and make your property more profitable.
