Tax Deductions Real Estate Property Owners Need to Know About
If you are a real estate investor or property owner, then there’s a chance you could be losing money due to ignorance. There are certain tax deductions that apply specifically to the real estate market, and most of them do not even require an accountant to file a petition. In the following short article, we’ll give you a rundown of some of the most common CRE tax deductions for which you might be eligible.
CRE Tax Deductions for the Real Estate Investor
Once you get beyond the filing of Form 20140, which is the individual tax return, then the other taxes attached to owning real estate come into play. Remember to file the relevant deductions on Schedule A before moving on to the specific property taxes that are endemic to your state of residence (assuming that this is where your commercial real estate property is). The money you make from this property will also be delineated in terms of fair market value at that location, and paid by you as income tax.
Housing Taxes – State and Local
Insofar as the CRE tax deductions for which you are eligible are concerned, there’s a handful of these: sales tax, mortgage insurance premium, local and state real estate tax and home mortgage interest tax. The state and local CRE tax deductions may be as much as $10,000 for the single unmarried investor; or $5,000 from each spouse if married. This tax includes the land, any vacation time taken, the property itself and any taxes for which you’re responsible on residential property that may be outside of the US.
Even if you are a member of the armed services, there’s a CRE tax deduction for which you are eligible – any stipend or allowance that you receive from the United States military can be used as deductions. Deductions also exist for renters, so you don’t need to actually own the home for you to benefit. This is just the tip of the tax iceberg when it comes to deductions; you can readily find a list of nondeductible items just to make sure you cross your I’s and dot your t’s; these include property taxes on land that’s not yours, utilities, etc.