Most investors don’t like to brag about their losses, they focus solely on the upside… but in the world of taxes and real estate – a penny saved is a penny earned.
Investing in real estate brings some incredible tax benefits, and savvy real estate investors understand that losses can actually put some serious cash in your pocket in the long run.
The key to maximizing the benefit of your real estate investment to increase cash flow while lowering your taxable income. Your AGI (Adjusted Gross Income) is the final number the IRS recognizes as the amount of income on which you need to pay taxes. It starts out with your wage income and then allows you to take out a few deductions before you are left with your final AGI. These deductions are essential to lowering your AGI and rental properties provide some serious deductions that you wouldn’t otherwise be able to deduct from your final taxable income. The deductions that will provide the best bang for your buck are active participant, depreciation and interest expense…. Read More