http://www.maverickinvestorgroup.com/residential-investment-property | Residential investment property is one of the most tax-advantaged asset classes in the U.S., but failing to engage in proper tax planning can cost real estate investors big money. Consulting a skilled tax professional who specializes in investment real estate is crucial to maximize your tax deductions, and to ensure you are following all the legal formalities in doing so.

1. How to Keep More of the Money You Make from Your Rental Properties:
The Crucial Role of Strategic Tax Planning for Real Estate Investors
Residential Investment Property is about the most tax-advantaged asset available in the U.S.
today. The government provides you extraordinary incentives to buy and hold rental property,
but you need to understand how to legally and properly take advantage of the tax benefits
available to you.
Pre-emptive tax planning is an essential part of the overall financial strategy for smart real
estate investors. Without the right planning, taxes could unnecessarily eat a substantial portion
of your profits. In addition to helping you buy performing residential investment property,
Maverick Investor Group can help connect you with tax professionals who specialize in working
with real estate investors to maximize tax benefits.
While this post cannot offer any specific tax advice, a general example of the extraordinary tax
incentives for buying rental property and renting it out is your ability to “depreciate” the rental
property even as it is going up in value! After you subtract the value of the land, the remaining
structure of your property can be depreciated over 27.5 years. So, if the structure of your
property is valued at $275,000, you would be able to depreciate $10,000 per year, even as your
property appreciates in value. This is what is known as a “phantom loss”, and your CPA can
help you take this loss as a write-off against gains (such as income from positive cash flow) that
you make on the property. If you have a CPA that really knows what they are doing, you can
actually accelerate the depreciation on certain items in your property, which can be broken out
and itemized on separate accelerated depreciation schedules.
Now, normally when you sell a property you would need to “recapture” the depreciation that
you took, but the U.S. tax code even provides a way for you to defer that called a 1031 like kind
exchange, where you can follow a procedure for re-investing the proceeds into a “like kind”
property in order to defer depreciation recapture. Be sure to consult your CPA so you do this
properly as there are formalities that need to be followed.
The most coveted status for tax advantages in the real estate space is the “real estate
professional” status. If you can qualify for this (or if just one spouse can qualify for a couple
that is married and filing jointly), this lets you write off your real estate losses (such as
depreciation, etc) against all other forms of income (including earned income from your job or
your spouses job). The IRS is tightening rules concerning who can qualify as a “real estate
professional”, but consult a CPA who specializes in this area to see if it is a possibility for you.
While buying and holding residential investment property affords you some of the most robust
tax benefits, it is crucially important that you are working with a highly qualified CPA so you
ensure you are taking these deductions legally and following all of the necessary formalities.
Penalties for evading or underpaying taxes or engaging in deceptive practices to dodge taxes
tend to be harsh, so be sure to work with a qualified professional to keep all your tax filings on

2. the up-and-up. The benefits that are offered to you by the government, which are completely
legal and which you are encouraged by the government to take, are so profound that you don’t
want to accidentally make a mistake and get penalized. So, always ensure you have a qualified
tax professional at your side.
In addition to introducing you to buying opportunities for rental property in the best real estate
markets, Maverick Investor Group can also introduce you to some of the nation’s top tax
professionals who specialize in working with real estate investors to minimize tax liability.
About Maverick Investor Group
Maverick Investor Group specializes in working with individual real estate investors. Our clients
live all over the U.S. and all over the world. Maverick introduces real estate investors to highly
advantageous buying opportunities for turn key real estate that are not available to the general
public. We also connect investors with tax, legal and other professionals that can add value to
your real estate investing experience. Learn more by visiting
http://www.maverickinvestorgroup.com/.
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