At its most basic, Basis is the cost of the item. With a simple item such as a vehicle the definition would stop there and this would be a really short post. However, Basis also includes the cost of acquisition and in real estate those line items can be significant expenses. Here’s a short-list of the most common:

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All Real Estate Taxes are Deductible…

Well like all things tax code; not always. In fact, many tax professionals get this one wrong too. Further, the same mistake is pervasive on both personal residences and investment properties.

A thorough review of your real property tax bill will reveal the total is the combination of many different items and it is in those details that the answers are buried. Let’s use an example tax record to take a closer look. Our example property was randomly pulled from HUD foreclosure list.

Review of the tax section reveals that the total tax bill is $6,114. The $6,114 is the total of $3,068 State/County Tax, $2,515 City Tax, and $531 Special Tax. There is also a space for Refuse if the local jurisdiction includes that as part of the total.

The requirements to be able to deduct a real estate tax are: Continue reading

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Depreciation…Blessing or Curse?

This week we are going to begin embarking on a journey that starts with the concept of depreciation and leads us to many forks in today’s tax code.  We’ll talk about exactly what depreciation is further in the post; but, …

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Special-K…1099 that is

Congress is rolling out the reporting red carpet in a big way in 2011 and 2012.  While some of these new reporting requirements do not affect real estate investors directly; for the most part, news of the introduction of each …

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Does Anybody Know Where I Can Find Uneven Footwear?

ffffffffffffffffffffffffffffffffffffffffffffffffffffff fff I went to Target – Nope. fff I asked my greeter at Walmart – Nada. fff K-Mart? Sears? – Negative. fff Google? Yahoo? Bing?  – Zilch. ffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffff Ever since I attended a recent real estate convention at the …

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