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Deducting Mortgage Interest

It pays to take mortgage interest deductions

If you itemize, you can usually deduct the interest you pay on a mortgage for your main home or a second home, but there are some restrictions.

What counts as mortgage interest?

Deductible mortgage interest is any interest you pay on a loan secured by a main home or second home that was used to buy, build, or substantially improve your home. For tax years prior to 2018, the maximum amount of debt eligible for the deduction was $1 million. Beginning in 2018, the maximum amount of debt is limited to $750,000. Mortgages that existed as of December 14, 2017 will continue to receive the same tax treatment as under the old rules. Additionally, for tax years prior to 2018, the interest paid [Read More]

February 13th, 2020|Articles|

Self-Directed IRAs and Real Estate Rentals

Do you manage a property that is owned by an IRA?  If not, would you like to but are just not sure how? As a property manager, just knowing the basic rules makes you a valuable partner for your owner.  You will find that some owners unintentionally may want to make a decision that will totally cancel out their IRA structure, but if you know the basic rules, you can protect their interests. 

​​​​​​​All management contracts, deeds, and legal documents must be in the name of the IRA and not the IRA owner’s name. When applicable, documents may be in the name of an IRA/LLC.

For the purposes of determining prohibited transactions through a self-directed IRA, the following people are considered disqualified persons:

August 27th, 2019|Articles|

Planning considerations for foreign citizens selling U.S. real estate

Credit: everydayplus c/o FreeDigitalPhotos.net

Options for navigating withholding rules

The first time many Foreign Citizens hear the term “FIRPTA” is from their listing agent when they’re selling U.S. real estate.

Under the Foreign Investment in Real Property Tax Act (FIRPTA), “the disposition of a U.S. real property by a foreign person” is subject to the withholding rules under Section 1445 of the Internal Revenue Code (IRC). That is a massive 15% of the sale price.

While many real estate agents, closing agents and advisors are aware of the FIRPTA legislation, the withholding rules and the various methods of complying can be complex.

Filing a U.S. tax return

Foreign Citizens who own property in the U.S. are not required to file U.S. tax returns unless the property generates rental income or they [Read More]

August 23rd, 2019|Articles|