Make your property an income generator – while reducing your income tax burden

Among the many benefits of property ownership is your ability to put your property to work generating rental income for you.

Of course, the downside of that rental income is – you guessed it – income tax.

At CS&P, we believe everyone should pay the minimum amount of tax they can. Our tax and legal professionals help you devise strategies to reduce or eliminate the amount of tax you owe.

You have no obligation to pay more than the minimum amount of tax you owe

One strategy will be to review the tax code in your existing jurisdiction and see whether you are neglecting to take advantage of any deductions or other tax mitigation opportunities.

Another strategy will be to transfer ownership of the properties to a newly created legal entity. If set up properly, that entity will enjoy tax advantages that personal ownership does not confer. In addition, the legal entity construct shields your other assets from seizure or forfeiture should, for example, someone be killed or injured on the property and choose to pursue a lawsuit – only the entity associated with that property could be liable.

One related point: If you are seeking to purchase rental property, CS&P can help arrange for financing through third parties.

Find out about CS&P tax and liability reduction strategies

Problem: Martin owns a home in which he and his family live in plus several rental apartments and homes all of which he personally owns. Martin believes that he is paying too much in income taxes from the rental income. He also worries about his personal liability should a guest at one of his rental properties drown in the swimming pool or become injured while on the premises. How can Martin lower his income taxes and avoid personal liability should someone get injured on one of his properties? Martin is also considering selling his rental properties and investing in an apartment building to consolidate his holdings.

Solution: We can analyze Martin’s tax returns to see if he is missing useful deductions. We may recommend that he transfer ownership of his rental properties to a legal entity which may have additional tax deductions to lower his income taxes.

Having the rental properties owned by legal entities will relieve Martin of personal civil court liability should someone become injured on the premises and file a lawsuit against the property owner for negligence. Only the legal entity owning that particular property could be held liable.

We can protect a property owner from liabilities and with paying less taxes.