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Updated over 6 years ago on . Most recent reply
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Other than property tax are there any business taxes?
I know that you pay property taxes for the property you are renting out, but are there any business taxes that you have to pay as well? Is there somewhere that I could look to find out tax information?
Most Popular Reply
Sessalli,
Your best friend is going to be your accountant. This is a very individual question with lots of possibilities depending on the exact situation. You could probably disclose enough information on here so that we could give you a personalized answer, but you may not want to.
Tax treatment depends on a variety of issues such as how you structure your real estate investments, if you actively manage, how long/if you live in them, how you finance them, and how long you hold them before you sell them. This is also dependent on how you hold your rentals, such as in your own name, or some legal entity structure. If you have outside income from a job, that can also make a big difference on how the IRS will see your income.
All of those decisions have legal and tax consequences, with benefits and drawbacks to all of them. You could pay income tax on your profits, you could pay capital gains tax, or you could not pay any tax at all.
In my experience, a good real estate accountant is worth many multiples of their fee.
JD