Tax Strategy for the Week (June 28th, 2013)
Real Estate Investment Trusts
Tax Issue
Investors often seek to diversify the assets they hold by investing in the real estate market. A direct investment in real estate, however, requires the investor to be quite savvy in how he or she conducts the day-to-day management of the property. Often, an investor may have limited cash or poor credit and cannot invest in such property.

Applicable Tax Law

A real estate investment trust (REIT) collects investment money from several investors and uses this to purchase commerical real estate. The rental income is passed on to the investors.
An […]

Tax Strategy for the Week (June 21st, 2013)
Investments That Help Reduce Medicare Tax on Unearned Income
Tax Issue

Effective for taxable years beginning after December 31st, 2012, high-income individuals, estates, and trusts are subject to an unearned income Medicare contributions tax. The tax applies when the individual, estate, or trust has earning from certain investments, and total earnings exceed a threshold amount. The tax does not apply if the taxpayer’s income is below the threshold amount.

Applicable Tax Law

In the case of an individual, the tax is 3.8% of the lesser of net investment income, or the excess of modified adjusted gross […]

Tax Strategy for the Week (June 14th, 2013)
Vacation Homes-Maximizing Deductions
Tax Issue

Any dwelling used for both personal purposes and rented out during the year is subject to special tax rules. The amount of rental expenses allowed as a deduction against rental income is based on an allocation between personal and rental use. The rental expense deduction for mixed use property may be further limited by the amount of rental income received each year, resulting in a potential disallowance and carry forward of excess rental expenses.

Applicable Tax Law

·        When a dwelling unit is used for both personal purposes and rented out […]