Tax Favored Environment

CPA and Attorney Mark Kohler, at a REAPS meeting last year, advised investors to own or start a small business (even MLM, but we will save that for another blog), invest in real estate, and take advantage of operating in a tax-free or tax-favored environment. These are notes from that talk.

Potential deductions for real estate investors, or anyone operating a small business are:

• medical insurance
• family employees, employees, subcontractors 
• annual meetings/retreats
• capital expenses
• equipment and furniture
• business travel
• meals and entertainment
• business board meetings
• job-related education
• legal and accounting fees
• office rents and utilities
• office supplies
• business gifts
• repairs and maintenance
• parking fees
• telephone, ipads, internet, office expenses
• professional dues
• postage and shipping

Travel is more carefully scrutinized, but some ideas for real estate investors are to buy something, negotiate an agreement, or submit offers, even if they are rejected; visit a rental, hold a corporate meeting, or meet with a client or vendor.

Keep in mind that these are typically paid with pre-tax dollars.

Here are a few reasons that Mark Kohler recommends investing in real estate:

• The tax write-offs are incredible when you treat it as a small business. You
  may get to use those deductions against your ordinary income, but if not, they
  will carry forward until you sell any rental property.
• The value of the property will grow tax deferred until you sell, and you may
  even use other strategies to delay or avoid the gain entirely.
•  The far majority of rental properties allow investors to create tax-free cash
  flow based on the amount of write-offs related to the property.
• You can leverage your money to buy more ‘investment’ and thus increase
  your ROI- Return on Investment (something you can’t do with stocks, bonds
  or mutual funds).
• You can involve family members, travel to check on your rentals as a valid
  business deduction, enjoy average appreciation and growth that out performs Wall Street, and a variety of other benefits. 
• MOST IMPORTANTLY…it’s like a forced retirement plan.

Happy Investing!

CEO of Your Life

You are the CEO of your life. Take control of your own destiny. Take action. Learn about investment. Get creative - how can you solve a problem that needs solving? Start a business. Any business. Multilevel marketing is often the simplest and least expensive.

How about real estate?

Real estate investing allows you to

• Become financially independent, or at least to vastly supplement your current income (Higher Income);
• Use the power of leverage to create income even when you aren't there (Passive Income);
• Take advantage of great tax benefits
• Create a constant stream of income, regardless of the market condition (Increased wealth)
• Be your own boss (Self Employment)
• Work on your own schedule and from home
• Gain education from books, informal meetings or in exotic cruise locations (Personal Fulfillment)

Don't wait for others to give you the life you want for yourself. Get up and go get it!

Happy Investing!

Happy Holidays!