Secrets to homeowner tax savings

Sandy Botkin’s new book “Real Estate Tax Secrets of theRich” explains tax benefits for homeowners and investors in aneasy-to-read, authoritative format. The blessedly short chapters include simpleexplanations of sometimes-complicated tax rules with lots of examples and”Sandy’s elaborations,” which provide practical implementationadvice.

Just in time for the 2007 income tax filing season, Botkin’snew book provides strategies to resolve key tax issues so property owners canlegally minimize their tax bills. What is especially valuable about this newbook is the author doesn’t just explain real estate taxation, but at the end ofeach chapter there are citations to the Internal Revenue Code, tax courtdecisions, recent IRS rulings and other authoritative sources.

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The book includes basic tax explanations on virtually everytopic homeowners and investors need to understand. In addition, the authorprovides advanced tax strategies, such as how to avoid tax if yourprincipal-residence sale results in capital gains exceeding the $250,000 or$500,000 tax exemptions of famous Internal Revenue Code 121.

But this is more than a simple real estate tax book. Itprovides coverage of important tax topics most people don’t think about butshould know about

For example, Botkin explains how to deduct costs of lookingfor investment property to purchase, including travel expenses. Of course,there are lots of examples showing how the tax law applies differentlydepending on whether the investor is just starting out or already owns realtyinvestments.

Advanced-level real estate owners will especially profitfrom tax techniques that are a bit “over the top” but are perfectlylegal. To illustrate, for home sellers who rented their homes more than threeyears during the last five years and lost their $250,000 or $500,000principal-residence exemptions, the author explains how selling to your “Scorporation” can be beneficial taxwise.

The superb graphics, even with cartoons, make thepotentially dull topic of taxes especially interesting and easy to comprehend.Occasionally, Botkin even adds a bit of humor, such as his explanation of howincreasing your withholding allowance for $33,000 of additional homeownerdeductions is “like giving birth to 10 children (a $3,300 exemption each)? but a lot less painful.” I didn’t know CPAs were allowed to have a senseof humor.

Botkin’s explanations of how divorce and death affecthomeowner tax benefits are the best and easiest to understand. He even revealsa little-known tax loophole for a surviving-spouse head of household who canfile a joint tax return for up to two years after a spouse’s death. The authoralso simplifies the market value stepped-up-basis rule when inheriting propertyfrom a deceased co-owner.

If you thought it was impossible to understand the taxbenefits of owning your home and/or investment property, think again afterreading this excellent new book. Botkin explains the Internal Revenue Code tomake it as understandable as possible.

Chapter topics include “Why You Should Own YourHome”; “Buy a Home or Die in Poverty”; “Tax Basis: TheStarting Place for All Deductions”; “IRS Record Keeping Requirementsto Bulletproof Your Basis”; “Why Making Improvements to Your Home isMuch More Valuable than Making Repairs”; “Maximizing the New MortgageInterest Rules”; “Excluding Gain When You Sell Your Home”; “Exceptionsto the Two-Year Rule”; “Using an S Corporation to Avoid the Two-YearRule”; “Understanding Depreciation”; “Making LandDeductible”; “Splitting Income by Hiring Family Members”; and”How to Avoid All Gain on the Sale of Investment Property Using Like-KindExchanges.”

Not only is this an ultra-complete tax book explainingvirtually every topic applicable to homeowners and investors, but it is aneasy, enjoyable read. Too bad Botkin didn’t write the tax code because thenordinary people could understand it. On my scale of one to 10, this outstandingnew book rates an off-the-chart 12.

“Real Estate Tax Secrets of the Rich,” by SandyBotkin, CPA, Esq. (McGraw-Hill, New York), 2007, $24.95, 207 pages; availablein stock or by special order at local bookstores, public libraries and www.Amazon.com.

(For more information on Bob Bruss publications, visit his
Real Estate Center
).

Copyright 2007 Inman News

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