The Tax Benefits of Real Estate Investing

Believe it or not - some people invest ONLY for these benefits.

December 06, 2024 • Estimated Reading Time: 3 minutes

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Tax Benefits of Real Estate Investing

Investing in real estate offers significant tax advantages, including:

  • Mortgage Interest Deduction: Deduct interest paid on investment property loans may be deductible.

  • Depreciation: Deduct a portion of the property's cost over 27.5 years.

  • Property Tax Deduction: Offset costs by deducting property taxes.

  • Operating Expenses: Deduct expenses like repairs and management fees.

  • 1031 Exchange: Defer capital gains taxes by reinvesting in similar properties.

  • Qualified Business Income Deduction: Deduct up to 20% if investments qualify as a business.

  • Passive Activity Losses: Offset passive income with losses from real estate.

  • Home Office Deduction: Deduct home office expenses if managing from home.

  • Energy Efficiency Credits: Gain credits for energy-efficient upgrades.

  • Real Estate Professional Status: Deduct losses against other income if qualified.

Read more about all of these here. Consult a tax professional to maximize these benefits.

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