Investment Property Tax Benefits Reviewed In New Article

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A new guide on discusses the difference between owner occupied vs. investment property tax benefits., a new borrowers advice website founded just this April, has a mission to help consumers and borrowers alike in obtaining the latest information on mortgage lending trends, the real-estate market and the U.S. financial landscape for the purpose of helping them obtain a home loan they love. The new website is quickly becoming a trusted destination for current mortgage news and expert loan advice. The team at is devoted to help empower both first time and experienced homeowners with valuable resources, first-class knowledge and connections to top-rated industry professionals. To fulfill this goal is continually updating their website with new articles and guides; a recently posted one reviews the difference between owner occupied property vs. investment property tax benefits.

As the article explains, deciding which type of property (owners occupied vs. investment real estate) will provide more tax benefits is largely dependent on the property owner’s unique situation. The article says: “The truth is, the tax advantages of any investment are largely dependent on the overall income of the property owner. While each approach offers some advantages, how ownership of either type of property will impact your bottom line is something you should discuss – and discuss carefully – with a financial advisor or tax professional.”

With this in mind the article does point out a few factors property owners should consider when judging the tax benefits of owner occupied vs. investment property. For example, with owner occupied properties, the homeowner can deduct both property taxes and mortgage interest from their income, which can have a significant impact on the total tax they pay. This is usually listed as the primary advantage of owner-occupied homeownership – and it is, indeed, a big advantage.

However investment properties such as rentals also have some tax advantages. Landlords are able to depreciate their rental property and certain items they provide with the property; in many cases, the depreciation they can deduct exceeds the home’s actual decline in value. Also, investment properties can be part of a self-directed IRA (individual retirement account), which can help mitigate the tax burden of rental income.

Another thing to consider is that owners of owner occupied real estate will not need to pay any capital gains tax if they sell their home; this applies for homes with a sale price up to $250,000 for a single or $500,000 for couples filing jointly. However, this may change if the owner has deducted the use of the home as a business. Owners of investment properties will have to pay the capital gains tax when they sell their property, but investment properties that have been owned for more than a year or two usually are subject to lower capital gains taxes than other investments. In addition, landlords can defer capital gains tax on the sale of a home when they purchase another home within a limited time frame (this is referred to as an exchange).

As with any tax related advice, the best advice is to consult a professional that can give information on the unique situation of the property owner. The article ends by saying:

“An investment property is just that – an investment. No matter how many property-related shows you’ve watched on HGTV or TLC, you should approach an investment property purchase with the same emotional detachment you’d have if purchasing say, energy stocks, and make sure it fits your overall investing strategy and portfolio; any analysis should include multiple factors – not just taxes. Likewise when buying a home to live in, you need to look beyond the potential tax advantages and consider how it will suit your needs, both now and for the entire time you plan to live in it.”

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Kevin Blue
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