Real Estate

Archive for June, 2011

Business Tax Deduction Tips

Tax Deductions Business Tax Deduction Tips

Tax tips and tax help to assist taxpayers by describing options
for tax reduction and tax cuts through lawful tax deductions.

Tax deductions contribute to national prosperity by providing capital to business. Tax deductions reduce taxable income. A 100000 tax deduction reduces federal income tax by 35000 100000 X 35 assuming a 35 income rate. Options for increasing business tax deductions include revising depreciation schedules reviewing fixed asset listings casualty losses bad debts and charitable contributions.

Real estate depreciation offers substantial opportunity for increasing tax deductions. Most depreciation schedules are established by simply separating land and longlife improvements. This simple approach is lawful but sharply understates lawful depreciation. About 2040 of improvements for most properties are shortlife items. Short life items can be depreciated over 5 7 or 15 years. There are about 130 shortlife items that have been determined by legislation tax court decisions and IRS rulings.

Real estate depreciation can typically be increased by 50100 for the first 57 years of ownership by obtaining a cost segregation study. A cost segregation study precisely values up to 130 components of real estate that can be valued as shortlife property.

By obtaining a cost segregation study it is possible to obtain a windfall of tax deductions by catchingup previously underreported depreciation. This onetime catchup can occur in the first tax return filed after the cost segregation study is performed without filing any amended tax returns.

Reviewing fixed asset listings of business personal property can generate a meaningful amount of tax deductions. They often include items that should have been expensed which have been sold or thrown away or which have an excessive depreciation life. Items that should have been expensed include operating expenses sometimes included by error and maintenance or repairs which was necessary but did not increase the life of the assets or component. Section 179 allows business to use up to 108000 of 2006 capital expenditures as tax deductions. Confirm you are not capitalizing assets that could be claimed as a tax deduction.

Casualty losses also offer opportunity for tax deductions. For a casualty loss you can deduct: 1 the market value immediately before the casualty less 2 the market value immediately after the casualty less the amount covered by insurance. The portion that is not intuitive is: the market value after the casualty is much less than the value before plus the cost to renovate. Other factors which can and should be considered for tax deductions are: lost rent/usage stigma in some cases construction management construction risks and entrepreneurial effort.

Bad debts are a subjective matter. Judgment is required to accurately estimate the amount that should be claimed as a tax deduction. If bad debts have not been examined carefully for several years they may offer a meaningful tax deduction opportunity. This applies to companies who utilize accrual accounting. Companies who use cash accounting cant claim a tax deduction for bad debt since they never recognized the revenue.

Do well by doing good. You reduce taxes in several ways when making charitable contributions. For example you purchased land 10 years ago for 200000 and it is now worth 1000000. However you now realize you will never use the land for the intended purpose. You can donate the land to a qualified charitable organization and take a tax deduction for 1000000. However you do not have to pay capital gains taxes on the appreciation.

Tax deductions sometimes seem arcane and complicated. However a knowledgeable team of advisors from several fields can reduce your federal income taxes. The complexity of the tax code makes it difficult for any one personal to be knowledgeable in all areas.

Cost segregation produces tax deductions and reduces federal income taxes across the country and in every size market. Below are just a few examples of cities where cost segregation generates meaningful tax deductions.

City:

• New York NY
• Houston TX
• Hartford CT
• Las Vegas NV
• Memphis TN
• Philadelphia PA
• Orlando FL
• Phoenix AZ
• Atlanta GA
• Bridgeport CT
• Worcester MA
• Akron OH
• Harrisburg PA
• Salt Lake City UT
• St. Louis MO
• Portland OR
• Scranton PA
• Greenville SC
• Bakersfield CA
• Madison WI
• Chicago IL
• Fresno CA
• Riverside CA
• Albany NY
• Indianapolis IN
• Birmingham AL
• Ft. Lauderdale FL
• Baton Rouge LA
• Augusta GA
• Honolulu HI

Cost segregation produces tax deductions for virtually all property types including the following:

Property Type:

• Medical facility
• Shopping mall
• Restaurant
• Country club
• Fast food restaurant
• Power center
• Hotel
• Car wash facility
• Convenience store
• Health spa

Almost every industry including the following can generate costefficient tax deductions by using cost segregation.

Industry:

• Golf courses and country clubs
• Transportation equipment manufacturing
• Electrical component manufacturing
• Real estate lesser
• Apparel manufacturing
• Wood product manufacturing
• Plastic and rubber products manufacturing
• Furniture stores
• Beverage and tobacco product manufacturing
• Building supply dealers

OConnor amp; Associates is a national provider of investment real estate consulting services including commercial real estate appraisals business personal property valuations business purchase price allocations business valuations cost segregation studies due diligence and insurance valuations. OConnor amp; Associates is a national provider of income tax tax deductionproperty taxreal estate consulting market researchcondemnation appraisalshighest and best usecost segregationfinancial modelingGalveston central appraisal districtTips and Tricks for Appealing Your Property Taxes in BrazoriaBrazoria county appraisal and Federal tax reduction. Appraisal services are provided for all commercial property types including nursing homes discount stores truck terminals tennis clubs supermarkets country clubs medical offices miniwarehouses restaurants vacant lands skating rinks community shopping centers power centers car wash facilities and service stations.

About the writer:  Patrick C. O’Connor has been president of O’Connor Associates since 1983 and is a recipient of the prestigious MAI designation from the Appraisal Institute. He is also a registered senior property tax consultant in the state of Texas and has written numerous articles in state and national publications on reducing property taxes. He continues to set the standard in direction and quality of our appraisal products adding services ranging from business valuations and business appraisals to cost segregation analysis for income tax reduction.

Before Purchasing Rental Property You Must Know These Dangers

Purchasing rental property can be exciting and rewarding but there are danger zones that you must learn to avoid first. Find out what you have to watch out for when buying rental property today.

Your Rental Property has to Meet the Local Fire and Safety Standards

The landlord tenant law in most areas will require landlords to keep their rental property in a liveable condition. If you want to have a troublefree lease with your tenants you will have to first make sure that your property meets the local housing codes.

Unlike paper assets such as shares and bonds which requires zero money and time to maintain keeping your rental property in good shape demands a lot of energy and attention.

When purchasing rental property you must consider all the necessary repair and renovation costs before making your choice. That rundown shack may be going for a rock bottom price but after adding in hefty repair bills it may be not that good a bargain after all.

That’s why it’s always recommended that you hire a home inspector or licensed contractor to help you inspect the property and give you a more accurate estimate of the repair fees when picking your property investment.

You will have to Master the Art of Dealing with Your Tenants

Purchasing rental property is similar to running a business in some ways. While customers are the lifeline of any business tenants are a vital source of income for a landlord.

To maximise your rental profits you will need to master a whole package of landlord skills. This includes screening tenants collecting rent handling complaints and even evicting them if necessary.

With the human element of tenants coming into play you have to brace yourself for nasty surprises such as non payment of rent or unexpected property damages. That’s why you will always have to set aside a sum of money for emergency repairs or loss of rental income.

You will Usually Need More Time to Buy and Sell Rental Property

Compared other forms of investments such as shares and currency rental properties tend to be more illiquid. What this means in layman terms is that it takes a lot more time and effort when it comes to selling and purchasing your rental property.

While you can trade shares and currency easily with an online brokerage account or a simple phone call there is a lot more paperwork and steps involved when your rental property is changing hands.

If you want a good deal for your rental property it will usually take months just to find a real estate with the right price tag. After that you will still to settle all the agent legal and transaction fees that can easily run into the thousands. On the other hand shares and other investments tend to rake up much smaller transaction costs.

Teo Zhenjie has been showing landlords how to manage their tenants and rental property effectively on Propertydo http://www.propertydo.com/ To learn more important tips on purchasing rental property visit his website today for stepbystep real estate guides free resources and forms.

About the writer:  Teo Zhenjie has been showing landlords how to manage their tenants and rental properties effectively on Propertydo.com http://www.propertydo.com/ Visit his website today for stepbystep real estate guides free resources and forms.

Austin Texas Neighborhood Profiles : Clarksville

The West Austin area of Clarksville was originally a freedman’s colony for slaves freed after the Civil War. It now has a very diverse population and this diversity is reflected in the various nationalities of the residents. There is an excellent public grade school in Clarksville named Mathews Elementary.

Every fall Mathews holds a carnival on the grounds which includes the Clarksville Annual International Dinner and the Octoborama Festival which is held at the end of October. During Octoberama local musicians many of whom are the parents or relatives of Mathews School students perform at the carnival. Also most of the kids bring large quantities of food to be sold at the International Dinner to reflect the cuisine of the countries of their origin.

Since most of the University of Texas Division of Housing apartment complexes are located in the West Austin area and the grade school children residing there with their parents attend Mathews many ethnicities and heritages are represented at the dinner including Chinese Korean Japanese Mexican and various African and other nationalities. While at the Octoberama Festival you can hear local musicians sample all kinds of homemade food watch contests such as twolegged races and relay races and enjoy juggling and facepainting which all of the kids love.

Right down the street from the school is another Austin legend Nau’s pharmacy which has one of the oldest soda fountains in Austin. You can have eggs for breakfast or a shake after school at Nau’s and then head down to the 9th Street dog park.

There are many good restaurants in the Clarksville area and this area is a short bus ride or long walk to Lady Bird Lake and the jogging trails or you can go downtown by bus or on the sidewalk just a mile or so in the other direction. There are also a number of historic homes in the area including a home referred to by the children as “the Castle” since it looks just like a medieval castle but which was originally a military college building.

There is also a “Moonlight Tower” another local landmark in the area of the Castle. Austin and Clarksville are home to many local politicians and wellknown Austinites. Ann Richards was a regular at the drug store soda fountain and most Hollywood celebrities visit the restaurants when in Austin.

The Johnson Creek Hike and Bike Trail skirts the western edge of Clarksville and winds along under the Loop One freeway also called the MoPac for the Missouri Pacific rail line which runs directly alongside the freeway. You can walk ride a bike or jog up and down the hike and bike trail which crosses Johnson Creek in one place and begins at Austin High School on the northern shore of Lady Bird Lake.

From the Austin High School access point to the trails You can cross the lake which is actually the Colorado River and hike through Zilker Park or swim in Barton Springs or go north and once past Clarksville you eventually wind up in the Brykerwoods area if you go south you can head down to the Barton Hills and Travis Heights.

Clarksville is also home to various arts and crafts establishments and the yearly Eeyore’s Birthday Party Celebration another fun local event which is held in Pease Park on the northeastern perimeter of the Clarksville area. All in all The Clarksviile area of Austin is truly a great place to live whether you’re raising a family a student retired or any one of the varied lifestyles which flourish in Austin. You will always feel at home in Clarksville.

About the writer:  Ki lives in Austin and spends way too much time blogging. He also runs a site about Austin real estate which has a search of the Austin MLS and information on mortgage interest rates.