Broker Check

Real Estate Taxation

What type of real estate investments do you hold? Are you a real estate investor? Do you flip houses? Have you been involved in a development project? Will you consider investing in a syndication? How do you fee about investing in stocks vs real estate? Can I have my own property management company? Where to start with short-term rentals? When is a real estate agent paying too much in taxes?

LifeCycle Tax and Wealth Management’s team is experienced in crafting unique real estate tax strategies to meet each individual and businesses goals. We focus on reviewing an individual or businesses current situation, understanding their goals and future potential transactions, and crafting a unique strategy moving forward to allow these individuals and small businesses to minimize tax and let their money work for them efficiently.

A few reasons individuals and businesses get involved in real estate:`   

  • Tenants pay rent which can offset the related expenses the owner incurs to hold and maintain the rental real estate
  • Passive vs non-passive tax strategies
  • Small amount of investment is required in cash; lenders typically finance a large portion of acquisition
  • If you actively participated in a passive rental real estate activity, you may be able to deduct up to $25,000 of loss from the activity from your non-passive income
  • Cash flow stream to investor
  • Real estate can decrease tax liability even with income flows
  • Depreciation
  • Refinancing options for additional investments
  • Real estate professional status
  • Tax Credits

Our Advisor’s Tax Services for Real Estate Include:

  • Structuring tax efficient entities for various real estate activities
  • 1031 like-kind exchange strategies
  • Qualified opportunity fund planning
  • Installment sale strategies
  • Converting passive real estate tax losses into non-passive tax losses to offset other sources of income
  • Dealer vs investor consulting
  • Real Estate Professional status
  • Cost segregation planning
  • Disposition strategies of real estate
  • Analyzing aggregation elections
  • Self-directed IRA/401k consulting
  • Analyzing and identifying favorable appropriate economic units for grouping activities
  • Capital gains vs. ordinary income preservation strategies
  • Real estate investment grant planning
  • Federal and state historical tax credit planning
  • Land conservation easement planning
  • Management company planning
  • Tax efficient debt and equity strategies
  • Cancellation of debt income (CODI) planning
  • Debt financed distribution planning
  • Holding company planning
  • Land development strategies
  • Lease to construction strategies
  • Net operating income and cash flow analysis and planning
  • Short-term and long-term property management setup
  • Low-income housing, energy, solar, and enterprise zones tax credits
  • Syndication taxation

Common Errors that LifeCycle’s tax advisors will help you avoid include:

  • Paying ordinary income on sales of real estate due to poor tax planning
  • Inefficient use of tax depreciation
  • Failure to utilize your loss generated by selling and/or renting real estate
  • Using incorrect entity to maximize tax benefits
  • Getting caught in the gross receipts trap
  • Not following all the requirements for real estate professional
  • Disallowance of 1031 like-kind exchange due to not using third-party administrator
  • Self-Directed IRA/401k issues