Three Important Real Estate Tax Benefits Being Extended

Usually we post about real estate investment strategy, but from time to time there is pertinent news to share that impacts the real estate market on a whole.

This is one of those times as we see a federal spending bill head to the President’s desk to be signed off on.

Three Real Estate Tax Benefits Being Extended

Including in this bill are three tax benefits that expired at the end of 2017, but with the signing of this bill will be retroactive to 2018 and good through fiscal year 2020.

Some are retail buyer friendly, some are investor friendly – all are real estate market friendly!

1.) Exclusion of Forgiven Debt on Gross Income

Even though the mass wave of short-sales have since passed they still occur in today’s market everyday.  In fact, the last property I bought was a short sale.

With this extension anyone who sold their primary residence through a short sale will be able to exclude the amount of their mortgage that was written off by the bank.  If not for the exclusion that seller would have to pay tax on the forgiven amount as part of their gross income at tax time.

2.) Deduction of Purchaser’s Mortgage Insurance (PMI)

Those who own homes with mortgages that require PMI will be able to deduct the premiums they pay for that insurance.

If you bought a home with a mortgage and put less than 20% down then you likely pay PMI.

3.) Cost of Making Commercial Buildings Energy Efficient

This one is likely of interest to investors as any and all deductions are welcome when it comes to investment property.

With the extension of this tax benefit investors are able to write off the cost of making a commercial building energy efficient, which can certainly add up if you start talking replacing windows and adding alternative energy sources like solar.

Stay Informed to Stay Profitable

Real estate investing isn’t just about knowing the invest strategies, you also need to be in the loop on laws and tax rules in order to get the most value out of your investment.

Analyze potential investments with the property calculator,  but also be aware of how these things impact your investments.  A good accountant is worth their weight when it comes to investment properties from my experience.

Leave a Reply

Your email address will not be published. Required fields are marked *