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Richard and I just finished up = our mid-year review a little early this year. Each year, we make an appointme= nt with each other to review where we are and where we want to be. This year= was the year we super-sized the results. In fact, I think Richard is going to wrap up a couple more things and then basically take the rest of the year off.
Now, we need to focus on our tax planning. In fact, to be honest, we're a little late doing the planning t= his year. How are you doing with your tax planning for 2005? If you found that 2004 tax preparation was a little tough, especially for your real estate accounting, then you'll definitely want to read this email. I'll give you three tips for making your real estate accounting easier PLUS tell you ab= out the one big mistake you don't want to make with the IRS.
In a minute, I'll get back to t= hree tips for making real estate accounting easier plus I'll tell you about the one big mistake you don't' want to make with the IRS. But, first I want to tell you about a special we're running at TaxLoophol= es.
For the next few days ONLY, you can get the best-se= lling Easy Accounti= ng for Real Estate Investors Home Study Course for $50 off the regular price!&nbs= p; Plus, we'll include the best-selling "Loopholes of the Rich: How the Rich Legally Make More Money" and the critically acclaimed "The Insider's Guide to Making Money in Real Estate," co-authored with international investor Dolf de Roos. That's right! You'll save money learning how to properly record entries a= nd save taxes and get two books FOR FREE in the process. Don't wait – = Easy Accounti= ng for Real Estate Investors special offer is for a limited time = only.
Easy Accounting Tip #1:<= /b> Determine what type of real estate investor you really ar= e. There are four definitions available for a real estate investor. They are= :
· = Real Estate Dealer = span>
· = Real Estate Developer= span> = span>
· = Real Estate Professiona= l = span>
· = Real Estate Investor = span>
You can be one of these, or all= of them. Here's a quick summary of what it would mean to be each one, and wh= at that would mean for your taxes.
Real Estate Dealer: If you hold= a property for short term gain, you're probably a real estate dealer. That means you have a business. You're not an investor. That little difference means a huge difference in taxes. If you select the wrong business struct= ure or don't use one at all, you'll pay an extra 15.3% in taxes.
In today's market, flipping properties can be a great way to make some cash. Don't lose it all to tax= es by failing to create the right tax strategy.
Real Estate Developer: If you f= ix up properties or develop land, you're likely to be considered a real esta= te developer. That's a mixed bag. On one hand, you can reduce your tax rate using the new manufacturer's credit and on the other hand, you might get stuck not being able to expense some of your administrative costs.=
Real Estate Professional: If you can qualify as a Real Estate Professional, you'll be able to take full advantage of real estate expenses and phantom expenses such as depreciati= on against your other income. This is one test you really want to pass.
Real Estate Investor: Quite sim= ply, if you're a real estate investor, you're buying property to hold for the = long term. A lot of people think they're real estate investors, when, in fact, they are real estate dealers or developers. Know the difference! Making t= he wrong decision can cost you a lot on your tax return.
Easy Accounting Tip #2:<= /b> Understand how your creative real estate techniques will impact your tax return.
At a recent AICPA seminar for C= PAs, the speaker said that he estimated over 80% of accountants don't know how= to handle accounting for basic real estate. In today's creative real estate = investment market, you'll have a hard time finding help who understands all the term= s.
That might be the very best use= of the Easy Accounti= ng for Real Estate Investors Home Study Course. Give a copy to yo= ur bookkeeper and a copy to your accountant!
At the very least, make sure th= ey are very familiar with the following terms and how it will impact your tax planning: Option Purchases, Rent to Own, Sandwich Leases, and Wraps. By t= he way, you need to be versed in the tax consequences as well!
Easy Accounting Tip #3:<= /b> Start today! Be ready for your year-end tax return at year-end. Don't put off your accounting until the last minute. It will co= st you more in accounting fees. Chances are you won't get all of your legal deductions. And, finally, you've lost the opportunity to plan for taxes.<= /span>
I've said it before and I'll sa= y it again – if you or your spouse can qualify as a Real Estate Professi= onal, you should never pay taxes. If you do, you're either not doing good plann= ing or you don't own enough real estate. Period.
All of the tips I've talked abo= ut in today's newsletter are in Easy Accounti= ng for Real Estate Investors. You'll not only get the quizzes to = tell you what kind of investor you are, explanations of how creative real esta= te techniques impact your accounting and tax returns, but you'll also get pa= ges of actual entries to make into QuickBooks and samples of tax return pages. We've even included a CD with a chart of accounts for QuickBooks to get y= ou started. And, it's on sale right now, for a limited time. Don't hesitate.= If you're serious about real estate, get serious about the required accounti= ng.
Now, here's the big one. What is the one thing that can get you in plenty of hot water with the IRS?
Failure to keep records is the single biggest reason people lose at audits. Keep good records, so you can prove the deductions and you can sleep at night.
With the sudden increase in real estate investments, look for an upsurge in the number of IRS audits. If you're selected, will your records stand up? Find out by investing in the= Easy Accounti= ng for Real Estate Investors Home Study Course.
P.S. Take full advantage of all= of the tax loopholes and still sleep at night. Sa= ve today by ordering Easy Accounti= ng for Real Estate Investors Home Study Course and get Loopholes of = the Rich and The Insider's= Guide to Making Money in Real Estate for free. = span>
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