FOR INVESTORS

REAL ESTATE INVESTOR TAX RESOURCE

All info here is from internet and readers to verify with CPA.

Several tax aspects for investor: capital gains (long/short term), 1031 exchange, set-up in basic rule, depreciation, Operating-expense deductions, pass-through entities and carried interest, change to individual income tax and mortgage interest deductions.

  • 1031 Exchange

  • Opportunity Zone

  • Tax Cuts and Jobs Act (TCJA)

  • Trump 2018 Tax Cut Law : Reference link

    • Reduced Tax Rate

      • lower of the corporate tax rate from 35% to 21%

      • 2% decrease in taxes per income bracket.

        • The lowest tax bracket drops from 15% to 12%, while the highest taxable bracket drops from 39.6% to 37%. For higher income families, i.e. the top top earning 20% of individuals, the after tax income will increase by an estimated 2.9%. However, approximately 90 – 95%of individuals will still receive a 2.2% increase in their after tax incomes.

        • The standard deduction changes from $6,350 for an individual to $12,000. Additionally, the joint filing increases from $12,700 to $24,000 in deductions. However, it is important to note that the Act does eliminate the previous $4,150 deduction from income for each individual claimed on a tax form.

        • The list of available deductions is quite lengthy, however it includes:

            • Medical Expense Tax Deduction. — This deduction allows taxpayers to deduct approved medical expenses that are 7.5% or more of their listed income. Previously, only Seniors had the opportunity to deduct 7.5 percent.

            • Property Tax Reduction. — With the new tax law investment property taxes can be deducted up to $10,000. It is important to note that taxpayers must choose either property taxes or income / sales tax for their $10,000 deduction on state and local taxes.

            • Home Mortgage Interest with Greater Tax Deduction.

              • Limit the deductions on mortgage interest to the first $750,000 of a loan.

              • The interest on home equity lines of credit are no longer allowed to be deducted.

              • Interest of mortgage before 12/2017 can still deduct.

            • Increased Charitable Donations Tax Deduction Limit. Charitable contributions can be written off from 50% to 60%. Higher income earners can use this to lower tax bracket

    • On December 22, 2017, President Donald Trump signed the Tax Cuts and Jobs Act. Homeowners also are no longer allowed to deduct property taxes on their homes to the extent that state and local taxes, including property taxes, are more than $10,000