Difference between revisions of "The Tax Benefits Of Real Estate Investing"

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Revision as of 14:25, 8 January 2025

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Getting to the decision of which legal entity to choose, let's take each one separately. The most frequent form of legal entity is the organization. There are two basic forms, C Corp and S Corp. A C Corp pays tax as per its profit for 4 seasons and then any dividends paid to shareholders one other taxed. Hence the term double-taxation. An S Corp however works differently. The S Corp pays no tax on profits. The net profit flows through to the shareholders who then pay tax on that money. The big difference here i will discuss that the 15.3% self-employment tax doesn't apply. So, by forming an S Corporation, your saves $3,060 for all seasons on a profit of $20,000. The income tax still applies, but Seen someone is supposed to pay $1,099 than $4,159. That are a wide savings.

The great part may be the county is to get their tax money supply us with roads, fire and police departments, etc. Whether they use domestic or foreign investor dollars, most of us win!

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