Real estate investing offers incredible wealth-building opportunities — but it also comes with complex tax responsibilities. Whether you’re flipping houses, managing rentals, or investing passively, your tax strategy can make or break your return on investment.
🔑 Key Tax Concepts for Real Estate Investors
- Depreciation
Depreciation allows you to deduct the cost of a property over 27.5 years (residential) or 39 years (commercial). This non-cash expense reduces your taxable income — even if your cash flow is strong. - Capital Gains vs. Ordinary Income
Selling a property you’ve held over a year results in capital gains, often taxed at a lower rate than short-term flips, which are taxed as ordinary income. - 1031 Exchanges
Want to defer capital gains taxes? A 1031 exchange lets you reinvest profits from one property into another — but you must follow strict IRS rules and deadlines. - Passive Loss Limits
Rental losses may be limited depending on your income level and participation. Real estate professionals may deduct more if they meet material participation tests. - Entity Structure Matters
Should you invest personally, through an LLC, or under an S Corp? Your structure affects liability, audit risk, and tax reporting.
Maximize Your Real Estate Profits — Minimize Your Tax Bill
We help real estate investors structure their deals, reduce taxes, and stay IRS-compliant. Let’s review your portfolio and make sure you’re not leaving money on the table.
📅 Schedule a real estate tax strategy call today
👉 https://calendly.com/castlerocktax/30min
📲 Prefer to talk first? Call us at 786-686-6285
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