Tax Benefits of Investing in Real Estate

If you’ve been exploring different ways to create passive income, you may already know about the many benefits of real estate investing. After all, real estate is one of the most popular side hustles for physicians and for good reason.

[{"selector":"#anim-e7ee6b26-a04d-42cd-9471-737a19a8404e","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-5b5cad6d-3b41-4013-abbb-61366de4605f","keyframes":{"transform":["translate3d(-115.92356%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Read More

Tax law is complicated, but for this story, I’m going to try to break down some of the ways you can use these benefits to your advantage.

[{"selector":"#anim-d1437c1f-0c19-47ba-9cc1-dd4780eb3566","keyframes":{"opacity":[0,1]},"delay":0,"duration":2400,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-450f3aad-3538-48a5-87e7-9ee6336dfc4f","keyframes":{"transform":["translate3d(0px, -95.26052%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":2400,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Read More

Here are the Tax Benefits of Investing in Real Estate

Depending on the length of time that you hold the investment before selling it, those capital gains can be classified as either short-term (less than a year) or long-term (a year or longer).

If you have owned and used a property as your primary residential home for at least two out of the last five years before selling it, you’re eligible for this exclusion.

No Self-Employment or FICA Taxes Paid on Rental Income

Rental income is not subject to social security and Medicare taxes. Depending o n whether you’re employed or self-employed, you could be paying 7.65% to 15.3% toward this FICA tax on other income. Read More

Another big deduction is depreciation, whereby the IRS allows you to deduct the cost of business items that have a “shelf life,” like the building itself.

Tax-Free Borrowing (Refinancing)

If you refinance, you are able to borrow against the appreciation and increased equity of a property tax-free. You c an then use those funds for other investments and acquire more. Read More

SWIPE UP NOW TO READ MORE

[{"selector":"#anim-2cd2db92-965e-45eb-99dc-85e69e147502","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-73315155-3b82-496e-be89-4dcab261ef8d","keyframes":{"transform":["translate3d(-116.50794%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Read More

MORE STORIES

[{"selector":"#anim-63f1502a-beda-40f0-8582-e0882d5ded94","keyframes":{"opacity":[0,1]},"delay":0,"duration":4000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-3c7272e4-7843-41f9-9c3f-6db56b960572","keyframes":{"transform":["translate3d(-124.35897%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":4000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-3859d153-8dca-4dca-a165-1b994bb41030","keyframes":{"opacity":[0,1]},"delay":0,"duration":4000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-ca15478b-9b96-48cf-8c4f-65bb1afde273","keyframes":{"transform":["translate3d(-123.71794%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":4000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] 5 Reasons Passive Income MD Prefers Real Estate Over Stocks 7 Great Tax Benefits of Investing in Real Estate