this is why diversification is important; you need to have enough cash to meet all the requirements. Speaking of “following the rules,” it’s vital you know them all. If you do something wrong, you might accidentally disqualify the IRA, which means you would owe taxes. This includes not purchasing property for yourself or your immediate family members. (You can’t buy property from them or sell property to them, either), but there are many other more nuanced rules, as well.
TAX BENEFITS FOR REAL ES R REAL ESTATES INVES TES INVESTORS
Because both federal change and state/local taxes can vary, there’s no specific guidance I can give about that here. However, please understand that the tax ramifications of any kind of real estate investing will depend on your particular location and circumstances, as well as annual changes in the tax code. I strongly recommend that you consult with a CPA or tax attorney before beginning any real estate transaction or investment. With that being said, at the time that I wrote this book, there were some general tax-related benefits for real estate investors that I want you to know about. The first has to do with all the deductions real estate investors can get: mortgage interest, business expenses, such as property management, office, mileage, travel, educational events, etc.; repairs; and improvements made that increase your property’s value. All of these can be immediately deducted, with the exception of improvements, which are depreciated over time. Depreciation of the property itself, regardless of any work done, is also a tax deduction, and it’s done over the course of time. Commercial properties can depreciate over a longer time than residential (currently 39 years versus 27.5 years). The land on
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