Taxes for Real Estate Investors (6 Tax Benefits of Real Estate Investing for Beginners)
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The video features real estate investor Brian Schroeder and his accountant Sandy Ray discussing the benefits of owning real estate and how it can lower income taxes. They provide general information regarding real estate taxation, including the concept of depreciation, which allows the building portion of a property to be written off over time to reduce taxable income. They also discuss capital gains tax, which is the tax on the amount of capital gain when a property is sold, and the 1031 exchange, which allows investors to sell a property and exchange it for another without paying taxes on the capital gains. They also mention the stepped-up basis, which is when the basis of a property is adjusted to its fair market value at the time of the owner's death, resulting in significant tax savings for heirs who inherit the property.
Brian and Sandy also discuss FICA tax, which is the tax on earned income that includes social security and Medicare tax, and how rental property owners only have to pay ordinary income tax on their cash flow and do not have to pay self-employment tax. They also discuss tax-free borrowing, which allows investors to borrow against the equity in their rental properties without paying taxes on the borrowed amount.
They emphasize the importance of positive cash flow, keeping good records, and being comfortable with the number of properties owned. They also discuss how to find a good CPA for real estate investors and the importance of tax planning. Overall, the video provides valuable information for those interested in real estate investing and how it can benefit their tax situation.
The video features real estate investor Brian Schroeder and his accountant Sandy Ray discussing the