Are the Real Estate Tax Breaks Coming Back Too? | USTaxAid

Diane Kennedy's Blog

Are the Real Estate Tax Breaks Coming Back Too?

Written by Diane Kennedy, CPA on April 8, 2011


Forbes magazine just published an article about real estate, predicting that the next two years may very well be the best two years to invest. I’m paraphrasing here. My point isn’t so much about exactly when to buy and where, but the fact that real estate investing is coming back in vogue.

As people start getting back into real estate investing, it’s time to look at the old real estate tax breaks we used to all talk about.

Those have changed too, perhaps more even then the real estate markets.

If you’re jumping into real estate again, make sure any advice you get has been updated for the changes we’re seeing now. We’ve pulled some of our most popular real estate products off the website while we get them updated. My bigger concern is how many people are buying information now and it hasn’t been updated or they’re relying on what I told them to do 5 years ago. Things have changed, a lot, since then.

Don’t rely on outdated tax advice! The only thing worse than no advice is bad advice.

Just a few of the current tax issues facing the new real estate investor:

  • The limited partnership can be a bad structure for your real estate if you’re hoping to flow through losses.
  • A single member LLC can cost you an audit.
  • Series LLCs work great in pretty much every instance, except California, but the plan on how to take the taxes has been changed with the new Temporary Regs.
  • Real estate professional deductions mean IRS scrutiny. Make sure you can pass the muster if you get called before you take this deduction. Avoid stupid mistakes that flag your return if you use the REP status.
  • IRS clamps down on property transfers between family members.
  • Look out for cost segregation studies that don’t have good back-up.

There are so many changes – hundreds in fact – make sure what you’re doing is right! Keep track of us here at as we give you the most current tax strategies you need right now!

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