Real Estate Income can be Tax-Free
Most of the tax code that impacts individuals is based on cash accounting, meaning the dollars that go in and out of your account this year. Real estate is unique because of the high leverage available for investors, write-offs related to mortgage interest, and the ability to depreciate the asset during the time of ownership. By properly aligning your business setup, we attempt to pair your passive losses against your passive rental income, letting you collect tax free income for life. That tax shield is reclaimed by the government when you sell the asset. However, if the ownership is structured correctly, much of that tax shielding can be rolled forward throughout your life, largely disappearing in your estate and never being repaid.
While these structures will eventually involve your tax attorney and estate attorney, we can help you set up your initial structures to generate that tax free income and preserving the shield until you are ready to meet with your legal team.