benefits for real estate investors that I want you to know about.
The first has to do with all the deductions real estate investors can get: mortgage interest; business expenses, such as property management, office, mileage, travel, educational events, etc.; repairs; and improvements made that increase your property’s value. All of these can be immediately deducted, with the exception of improvements, which can depreciate over time. Depreciation of the property itself, regardless of any work done, is also a tax deduction, and it’s done over the course of time. Commercial properties can depreciate over a longer time than residential (currently 40 years versus 25 years). The land on which the property resides never depreciates. If you rent out a property, sometimes depreciation can get you a phantom gain. Here, on paper, the numbers look like a loss; however, because of the depreciation amount, you actually come out ahead. A investment focused accountant or CPA can help you figure out exact numbers for your situation. Section 85 Rollover In Canada, the Section 85 rollover is a tax provision that allows a business owner to transfer property to a corporation in exchange for shares without triggering an immediate tax liability. Here are some details and restrictions of this rollover: 1. Eligible property: The property must be eligible for the rollover. This includes depreciable property, eligible capital property, or inventory. Shares of a corporation or partnership are not eligible property. 2. Transfer price: The transfer price of the property must be equal to the fair market value of the property. The transfer price is the amount that the corporation agrees to pay the transferor in exchange for the property. 3. Share consideration: The transferor must receive shares
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