financial question
Thread Starter
Evolving Member
Joined: Aug 2004
Posts: 141
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im not too worried about cosigning for my gf...she makes a lil more than me anyways plus we have been together for 3 years and have a kid....i just didnt know what process to get what....also i was wondering if things show up on your credit report right away...like if you got a car then a couple days later got a mortgage....ah well i think either way we are gonna get the duplex first then get the car....usually car salesmen can lie on yer app anyways to get you approved...cant do that with mortgages
Thread Starter
Evolving Member
Joined: Aug 2004
Posts: 141
Likes: 0
^ is this true? im kinda stressing because i wanna get a new 05 because they are cheap and u get the free 2k in gas which would be great....but that ends on the 31 and my closing is sometime the first week in november! faaawwwwk!
I have the key to buying your Evo. actually Tom Lundstedt has the key, he is a former catcher for the Chicago Cubs and the Minnesota Twins and a recognized expert on real estate and taxation. www.tomlundstedt.com will have the complete information you need.
I just got back from some continuing education for my real estate license and I took Toms lecture. Definitely write in to your purchase and sale agreement that you are dividing the sale in to land, building, land improvements, and personal property. this is known as bifurcating. its legal and it will save you thousands. If you don't do it you are a moron, at least Tom says you are a moron.
The seller most likely won't care because he will get the money he wants, and he doesn't know that he will be paying the taxes that you will be saving.
most people depreciate their property on the basis of land and building. but that is totally lame because you can legally depreciate more than just the land and building. and since they are done at seperate rates you can save thousands on your income taxes by writing in to the sale that you are buying land, building, land improvements, and personal property (dishwashers, refridgerators and stuff like that.)
divide the sale price like this
building $xx,xxx (xx% of purchase cost)
land $xx,xxx (xx% of purchase cost)
land improvements $xx,xxx (xx% of purchase cost)
personal property $xx,xxx (this is the important one)
try to put most of the purchase price in the category of personal property. personal property depreciates over 5 years compared to the building which will depreciate over 27.5 years. this means that when you do your taxes you can can say that the personal property you purchased depreciated 20% in the first year of ownership.
so say that you are able to make the deal show that you paid $50,000 in personal property. when you do your taxes you will be able to say that your personal property depreciated 20% in the first year. that means you can tell the IRS that you lost $10,000. Not only will that $10,000 loss shelter the rental income from the duplex, the IRS will allow you to use that $10,000 loss to shelter $10,000 of your income from your regular job. And thats just the personal property depreciation. You will actually have more losses due to the depreciation of the building, but its depreciation won't save as much money as personal property.
This is all part of the Reconciliation and Recovery Act of 1993. This is a relatively unkown law, a lot accountants don't even know about. If your real estate agent doesn't know about it then you need to tell them about it, so that they write it into the purchase and sale agreement.
You need to write this in to the purchase and sale agreement so that when you file your taxes you can show the IRS that the seller sold you the property divided in to those 4 different areas. It will save you thousands on your income tax. The IRS doesn't care because either way they will get their taxes from the guy who gets the short end of the stick. And the final point is that you get to use the tax savings to justify the purchase of your Evo.
I just got back from some continuing education for my real estate license and I took Toms lecture. Definitely write in to your purchase and sale agreement that you are dividing the sale in to land, building, land improvements, and personal property. this is known as bifurcating. its legal and it will save you thousands. If you don't do it you are a moron, at least Tom says you are a moron.
The seller most likely won't care because he will get the money he wants, and he doesn't know that he will be paying the taxes that you will be saving.
most people depreciate their property on the basis of land and building. but that is totally lame because you can legally depreciate more than just the land and building. and since they are done at seperate rates you can save thousands on your income taxes by writing in to the sale that you are buying land, building, land improvements, and personal property (dishwashers, refridgerators and stuff like that.)
divide the sale price like this
building $xx,xxx (xx% of purchase cost)
land $xx,xxx (xx% of purchase cost)
land improvements $xx,xxx (xx% of purchase cost)
personal property $xx,xxx (this is the important one)
try to put most of the purchase price in the category of personal property. personal property depreciates over 5 years compared to the building which will depreciate over 27.5 years. this means that when you do your taxes you can can say that the personal property you purchased depreciated 20% in the first year of ownership.
so say that you are able to make the deal show that you paid $50,000 in personal property. when you do your taxes you will be able to say that your personal property depreciated 20% in the first year. that means you can tell the IRS that you lost $10,000. Not only will that $10,000 loss shelter the rental income from the duplex, the IRS will allow you to use that $10,000 loss to shelter $10,000 of your income from your regular job. And thats just the personal property depreciation. You will actually have more losses due to the depreciation of the building, but its depreciation won't save as much money as personal property.
This is all part of the Reconciliation and Recovery Act of 1993. This is a relatively unkown law, a lot accountants don't even know about. If your real estate agent doesn't know about it then you need to tell them about it, so that they write it into the purchase and sale agreement.
You need to write this in to the purchase and sale agreement so that when you file your taxes you can show the IRS that the seller sold you the property divided in to those 4 different areas. It will save you thousands on your income tax. The IRS doesn't care because either way they will get their taxes from the guy who gets the short end of the stick. And the final point is that you get to use the tax savings to justify the purchase of your Evo.
