Tax Time – A Time to Examine Your Real Estate Holdings

Income tax preparation time is a good time to re-evaluate your investment real estate portfolio. Your IRS depreciation allowance on your income property is a key benefit that helps shelter your rental income from income tax.

Rental rates have increased significantly over the past several years, but the amount you can depreciate has remained constant.  If you purchased your investment property long ago, your depreciation allowance may be relatively low. This year, ask your tax consultant if it would be beneficial for you to exchange your current income property to another property of equal value in order to boost your depreciation allowance.

If the answer to this question is yes, give me a call. I will give you an evaluation of your current property, find you a suitable replacement property, and ensure the proper steps are taken in order to qualify for an IRS 1031 tax differed exchange.

IRS Depreciation of Rental Property Guidelines: http://www.irs.gov/publications/p527/ch02.html#en_US_2013_publink1000219255

Tired of being a residential Landlord, but like the rental income?

Isn’t it great to receive that rental check on time every month and not have to lift a finger? You have the perfect tenant, never calls, maintains your property as if it’s their own and always sends the rent in on time every month like clock work. Your only job is to pay the property tax bill twice a year.

If that’s not your experience, and you are tired of the constant turn over of renters, the handyman request calls, handling neighbor complaints or collecting late rents, but you like the income and property value appreciation, perhaps you should consider a different type of property.

You can exchange your residential income property for a small retail property with a quality triple net lease tenant, such as Walgreens, MacDonald’s or a bank.

A triple net lease (NNN) means the tenant pays the property tax, insurance and building maintenance. All you do is receive the rent payments. A 1031 exchange means you defer your capital gains tax from selling your residential income property. All the proceeds from the sale can be used to purchase your new retail property.

If this sounds like something for you, give me a call for a no obligation consultation.