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A Real Estate Business Strategy To Generate Up To $500,000 From Your Home
The IRS has a ď2 Years and a DayĒ rule that can mean money over and above your home based business tax deduction.
This secret alone can mean that your own home can earn you half a million dollars, so this is one real estate business strategy you donít want to miss.
This IRS rule states you can generate up to $250,000 tax-free profit on your home, and up to $500,000 (if you are married) and $250,000 if you are not if you have lived in the home at least two years and one day out of five years of real estate ownership.
This means you can rent your home as part of your real estate business, get a home based business tax deduction and make up to $500,000 tax free. As long as you have rented your home for up to three years, you can take advantage of this great business strategy.
If you intend to make this claim as well as make a home based business tax deduction for your business, you need to move back into your real estate if it has been three years since you have lived there Ė but the amount of time you spend living in the real estate property before and after the rental counts towards the 24 month and one day rule.
As long as you have not bought and sold another real estate property while leasing out property A, this business strategy can work for you, helping you to make money from both the IRS and from any home based business tax deduction you qualify for.
Donít forget to grab any home based business tax deduction you can Ė you will be taxed some money on your profit, in all likelihood.
If you need more information a great resource is the IRS Publication 523 Selling Your Home at http://www.irs.gov
In Canada this business strategy for real estate is much better!
Canadians can qualify for a home based business tax deduction or two for their real estate business, but their capital gains taxes exceptions are even easier because you are exempt from such taxes on your main residence.
If you have multiple homes, call a CA to figure out whether this business strategy will work for you.
Your CA will be able to explain residency qualifications for you. Again, though, focus on each home based business tax deduction while also going for the capital gains exemption.
Itís a solid real estate business strategy to spend less on taxes than you have to in order to expand your profit line.
Thatís one way to make the most of each home based business tax deduction.
Take advantage of $147 in free investing tips showing examples of other investment techniques and real estate business strategy for you to profit from.
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Travel Part B