Expiring Real Estate Tax Provisions
For the real estate industry, several favorable components of the Tax Cuts and Jobs Act (TCJA) enacted Dec. 22, 2017, and the Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted March 27, 2020 are expiring, and the implications to taxpayers involved in...
The Effect of Biden’s Tax Proposals on the Real Estate Industry
Background As originally outlined in his “American Families Plan” on April 28, Biden’s individual tax proposals included increasing the top individual ordinary income tax rate from 37% to 39.6%, taxing capital gains and qualified dividend income at ordinary rates for...
Introduction to Tax Implications of Foreign Investment in US Real Estate
General Discussion of Taxation of Income from US Real Estate In general, foreign persons engaged in a trade or business in the United States, are taxed on two categories of income: 1. Income effectively connected with the conduct of a trade or business in the US...
How Real Estate Professionals can use Proper Tax Planning Techniques to Avoid the Hazards of the Passive Activity Loss Rules
Under the passive activities loss rules (PAL) - that is, activities in which you do not "materially participate", tax losses from rental real estate activities cannot be deducted against non-passive activity income (such as salary, professional fees, income from a...
Significant Tax Benefits Available to Qualifying Real Estate Professionals Who Properly Navigate Through the Complexity of These Rules
Many real estate professionals deal with the difficulties presented by the passive activity loss (PAL) rules. Regardless of how much time you spend working in your real estate activities, rental income or loss is generally considered passive and is subject to the...
The New 3.8% Medicare Surtax Creates Significant Tax Planning Opportunities for Qualifying Real Estate Professionals
Beginning January 1, 2013, the real estate industry will be faced with an additional 3.8% Medicare tax (the “Surtax”) that will add layers of complexity and more administrative burdens brought about by the Patient Protection and Affordable Care Act (Obamacare). The...
QO Zone Policy Exhibits
Exhibit 1. Comparison of After-Tax Accumulations with Equal Before-Tax Rates of Return, Four-Year Holding Period Exhibit 2. Comparison of After-Tax Accumulations with Different Before-Tax Rates of Return, Four-Year Holding Period Exhibit 3. Comparison of After-Tax...
Conclusion of The QO Zone Policy
The QO Zone policy has the potential to create significant tax savings for investors in QO Funds and much needed capital investments to low-income urban and rural areas. If this policy is successful, QO Zones can possibly motivate significant economic development and...
Factors to consider before investing in a QO Fund
While QO Funds have the potential to create significant tax savings for investors, they are not the best option for every investor. The following examples illustrate some of the factors to consider before recommending these investments to clients. The first factor to...
Illustration of tax benefits of QO fund investment
If a taxpayer realized a $200,000 gain from a taxable sale or exchange, the QO Zone policy allows the taxpayer to avoid a current year tax on the gain by investing it in a QO Zone Fund. As no income is recognized from the rolled-over gain, the taxpayer would receive a...