Most of your acquisition costs when acquiring a rental property are going to show up in the real estate closing statement. The closing statement is a financial instrument, not a tax document.
You need to go through each line item in the statement and assign it to one of the three following tax categories:
1.
Basis
2.
Loan acquisition
3.
Operations
Then, once you have divided your expenditures into these three categories, you often need to consider the best tax strategies for each. For example, in the basis category, you assign costs to land, land improvements, buildings, and personal property. Each dollar assignment has an impact on your profits.
This article gives you a useful guide to strategies that will help you build your rental property profits on the day you close escrow. ... Log in to view full article.
