1. Use Real Estate Tax Write-Offs
- Property taxes
- Property insurance
- Mortgage interest
- Property management fees
- Cost to maintain and repair the building
- Advertising
- Office space
- Business equipment (e.g., computer, stationery, business cards, etc.)
- Legal and accounting fees
- Travel
2. Depreciate Costs Over Time
3. Use A Pass-Through Deduction
4. Take Advantage Of Capital Gains
A capital gains tax may be assessed when you sell an asset, like a piece of property, for a profit. There are two types to be aware of: short-term and long-term. They each impact your tax situation differently.
Short-Term Capital Gains
Long-Term Capital Gains
5. 1031 Exchange
6. Opportunity Zones
- Defer paying capital gains until 2026 (or until you sell your stake in the fund).
- Grow your capital gains by 10% if you hold the fund for 5 years; 15% for 7 years.
- Avoid paying capital gains entirely if you remain invested in the fund for 10+ years.
7. Business Tax Benefits
Take Advantage of Your Tax Benefits
There are a lot reasons to invest in real estate, and tax benefits are just one. If you're considering real estate as an investment, get preapproved first. This will help you be prepared to make a great purchase.