Many business owners you’ll
speak with mention that it’s a good idea to own real estate. We should state at the outset that we’re not
talking about owning your own home but rather investing in real estate. It could be in a Real Estate Investment Trust,
more commonly known as REITS or even a single rental property. Real estate is now a new segment of the S & P 500 categories for investment classes.
One of the primary reasons
business owners use real estate as an investment is for the favorable tax
deductions such an investment affords.
Additionally, some feel it’s better to own a building that you use for
your business rather than leasing it. Whatever the reason it’s worth taking note of.
Over the next two posts we
will begin to offer two techniques or programs to help the business owner
capitalize on tax treatment of Real Estate.
The first program is what is called a 1031 exchange. In this plan we’ll show you how to avoid or
at least minimize the capital gains tax when you sell a building. In the following article we’ll map out steps
on how to handle passive investment loses.
Is this plan appropriate for all business
owners? Absolutely not. But just like all facets of financial planning
it offers a good way to diversify and it might meet “some” of your goals for “some”
of the business owners.