Tax implications of investment prop. - Posted by Mike T

Posted by JHyre in Ohio on July 22, 2002 at 06:30:33:

Your question is quite broad, and the answers re in the MNG archives. In a nutshell, the tax advantages of investment property are:

  1. Ability to pay low capital rates, instead of high ordinary rates, upon sale;
  2. Ability to take depreciation deductions against orndinary-rate income (i.e.- rents), and pay the depreciation back at lower 25% rate- or never pay it back by holding forever;
  3. Ability to 1031;
  4. Ability to do installment sales.

John Hyre

Tax implications of investment prop. - Posted by Mike T

Posted by Mike T on July 20, 2002 at 17:49:49:

I am trying to understand what the advantages and bottom line would be on holding investment properties (i.e. by lease/option). For example, capital gains tax; how does depreciation work including what ‘recapture’ is.

I think I understand that option consideration is not taxable until the option is exercised or not.

Thank you