How you do business can effect your deductions

[Account Closed]

I came across this link to day while factual for the most part it can be misleading.

http://www.foodconsumer.org/newsite/Non-food/Miscellaneous/basic_tax_tips_for_real_estate_investors_2905100831.html

First, I thought it strange that it was being posted on a food consumer website. As I read the article I noticed that the audience was primarily homeowners that are becoming landlords (property managers). This group of landlords probably do not have a real estate business.

Some tax deductions are only available to businesses. A passive investor in real estate can deduct anything directly related to the investment activity which would include mortgage interest, but would not generally include credit card interest even if the card was exclusively use for the rental property. As a business this interest would be deductible.

I put this out there because it is important to understand the best way for you to invest. There are some other concerns I have with this article some of you may notice.