RENT Magazine Q4'23

DEFER YOUR TAXES

BE PROACTIVE

1. Keep Accurate Records: Financial discrepancies lead to confusion and potential financial losses. Accurate real estate record-keeping leads to peace of mind, as fear of financial differences is minimized. 2. Prepay Your Property Taxes: Consider prepaying your property taxes, primarily if you reside in a high-tax state. 3. Maximize Deductions: Ensure that you are making the most of available tax deductions related to your real estate investments, i.e., mortgage interest, property taxes, and expenses related to repairs and maintenance. 4. Consult with an Accounting Advisor: Hire an accounting advisor to help with real estate bookkeeping, which will help with tax planning. These experts can help you identify potential deductions.

The best year-end tax tip for real estate investors is to maximize deductions through cost segregation. By identifying and segregating specific property components, such as fixtures or improvements, investors can accelerate depreciation and reduce taxable income. This strategy not only boosts immediate cash flow but also defers taxes to a later date. Additionally, consider taking advantage of 1031 exchanges to defer capital gains taxes when selling one property and reinvesting in another. Proper tax planning in the year's final months can lead to substantial savings, making it a crucial strategy for real estate investors looking to optimize their financial portfolios.

INVESTORS CAN ACCELERATE DEPRECIATION AND REDUCE TAXABLE INCOME.

FINANCIAL DISCREPANCIES LEAD TO CONFUSION.

Gita Faust Author of Residential Property Management for Landlords: QuickBooks Desktop Read Gita’s Book

Allen Brodetsky Real Estate Broker Southern California Boutique Realty Connect with Allen

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