Form 2555-EZ, which can provide up to an $85,700 income exemption if you spend at least 330 days of a consecutive 365 days off U.S. soil.-The 4 Hour Workweek by Ferris.
One dad thought that the rich should pay more in taxes to take care of those less fortunate. The other said, “Taxes punish those who produce and reward those who don’t produce.”-Rich Dad, Poor Dad by Robert Kyosaki.
The reality is that the rich are not taxed. It’s the middle class who pays for the poor, especially the educated upper-income middle class.-Rich Dad, Poor Dad by Kyosaki.
The Primary Residence Exclusion.-Real Estate Advantages by Rich Dad, Poor Dad.
IF you own a house and live in it for at least two years (out of 5), you sell it, and you don't have to pay any taxes on the gain.
Capital Gains exclusion is capped at $250,000 ($500k if married).
If your AGI is under $100k, you can offset up to $25k of your ordinary income from losses in RE (which would be passive losses, since RE gives you passive income).-Real Estate Advantages by Rich Dad, Poor Dad.
IRS pub 527: Residential Rental Property
If you rented your vacation home for fewer than 15 days in a year, your rental income would be tax free.-Real Estate Advantages by Rich Dad, Poor Dad.
The mortgage interest deduction is only available on your personal residence and one designated second home.-Real Estate Advantages by Rich Dad, Poor Dad.
1031 Exchange: you can defer taxes if you reinvest all the proceeds from the property into a new property.-Real Estate Advantages by Rich Dad, Poor Dad.
It must be investment property.
You have 45 days to identify a new property.
You have 180 days to reinvest (buy).
What you buy MUST be on the 45 day list.
You cannot touch the money in between the sale of your old property and the purchase of your new property. By law, the money has to be held by an independent third party called a qualified intermediary.
How you held title to the old property is how you have to take title to your new property.
In order to pay no tax, you must:
Buy equal or up.
Reinvest all of the cash from the sale of the old property into the new property.
The tax laws allow you to offset your earned income by up to $25,000 in passive losses from real estate, as long as your AGI is below $100,000. Above $100k is a graduated scale up to $150k.-Real Estate Advantages by Rich Dad, Poor Dad.
The laws benefit the risk-takers, the doers, who spur the economy. Therefore, if you invest capital into your community by buying real estate, you are rewarded with tax breaks so that you can maintain and continue investing while at the same time, you provide a valuable social service. As well, the government learned its lesson a generation ago that it does a very poor job of providing low-cost housing. It is more efficient to encourage the private sector through tax advantages to perform this service than for the government to muddle its way through the important community need of housing.-Real Estate Advantages by Rich Dad, Poor Dad.