EXCLUSIVE TAX STRATEGY CHECKLIST FOR

REAL ESTATE INVESTORS

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EXCLUSIVE TAX STRATEGY CHECKLIST FOR REAL ESTATE INVESTORS

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STEP: 1

PROPERTY ACQUISITION:

ENSURE ALL SETTLEMENT FEES AND CLOSING COSTS ARE RECORDED.
SEPARATE LAND COST FROM BUILDING COST FOR DEPRECIATION.

STEP: 2

RENTAL PROPERTY OPERATIONS:

KEEP DETAILED RECORDS OF RENTAL INCOME RECEIVED. DOCUMENT ALL OPERATING EXPENSES: PROPERTY MANAGEMENT FEES, MAINTENANCE, UTILITIES, ADVERTISING, ETC. TRACK TRAVEL EXPENSES RELATED TO PROPERTY MANAGEMENT.
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STEP: 3

DEPRECIATION STRATEGIES:

USE MACRS TO DEPRECIATE RESIDENTIAL PROPERTY OVER 27.5 YEARS AND COMMERCIAL PROPERTY OVER 39 YEARS.
CONSIDER A COST SEGREGATION STUDY TO ACCELERATE DEPRECIATION.

STEP: 4

INTEREST DEDUCTION:

DEDUCT MORTGAGE INTEREST ON LOANS USED TO ACQUIRE OR IMPROVE RENTAL PROPERTY.
KEEP PERSONAL AND INVESTMENT-RELATED DEBT SEPARATE.
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STEP: 5

TAXES AND INSURANCE:

KEEP DETAILED RECORDS OF RENTAL INCOME RECEIVED. DOCUMENT ALL OPERATING EXPENSES: PROPERTY MANAGEMENT FEES, MAINTENANCE, UTILITIES, ADVERTISING, ETC. TRACK TRAVEL EXPENSES RELATED TO PROPERTY MANAGEMENT.

STEP: 6

Repairs vs. Improvements:

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STEP: 7

Passive Activity Losses:

STEP: 8

Home Office Deduction:

If applicable, use the home office deduction for managing rental properties.
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STEP: 9

Legal Entity Structuring:

STEP: 10

1031 Exchanges:

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STEP: 11

Rental Property Sale:

STEP: 12

Tax Credits:

Investigate potential tax credits for which you may be eligible, such as energy efficiency or historical preservation.
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STEP: 13

Documentation and Receipts:

STEP: 14

Quarterly Estimated Taxes:

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STEP: 15

Year-End Strategies:

STEP: 16

Professional Consultation:

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