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186 Terms
22 Beginner

Tax Strategies & Implications Terms & Definitions

1031 exchanges, depreciation, tax benefits, entity taxation, deductions, and tax planning strategies.

What You'll Learn

  • Essential tax strategies & implications terminology
  • Practical applications and examples
  • Professional investment language
  • Common usage in real estate

Quick Overview

22
Beginner
35
Advanced

Structured Learning Path

Master tax strategies & implications with our progressive approach

Advanced

Advanced Applications

Complex strategies and professional concepts (35 terms)

Capitalization of Asset Retirement Obligations
56055

The accounting process of recognizing the estimated cost of an Asset Retirement Obligation (ARO) as a liability and capitalizing a corresponding asset, which is then depreciated over its useful life, reflecting the future costs associated with retiring a long-lived asset.

Unrelated Business Income Tax
43654

Unrelated Business Income Tax (UBIT) is a tax levied on the net income of a tax-exempt organization, including certain real estate investment vehicles, derived from a trade or business regularly carried on and not substantially related to its exempt purpose.

Premium Financing
38559

Premium financing is a sophisticated financial strategy where an investor borrows funds from a third-party lender to pay the premiums on a large insurance policy, typically a life insurance policy or substantial commercial property insurance, using the policy itself or other assets as collateral.

Self-Directed IRA
34904

A Self-Directed IRA (SDIRA) is a specialized retirement account allowing investors to hold alternative assets like real estate, private equity, and precious metals, offering enhanced control but requiring strict adherence to complex IRS regulations to avoid prohibited transactions and Unrelated Business Income Tax (UBIT).

Revaluation Surplus
19130

Revaluation surplus is an equity account on a company's balance sheet, representing the unrealized gain arising from the revaluation of an asset, typically property, plant, and equipment, to its fair value, exceeding its historical cost or previous revalued amount.

All Tax Strategies & Implications Terms (186)

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Page 7

Internal Revenue Code

Intermediate

The Internal Revenue Code (IRC) is the comprehensive body of federal tax law in the United States, governing all aspects of taxation, including income, estate, gift, and excise taxes, with significant implications for real estate investors.

2-3 min9164 views

Internal Revenue Service (IRS)

Beginner

The Internal Revenue Service (IRS) is the U.S. federal agency responsible for collecting taxes and enforcing tax laws, playing a crucial role in real estate investing through income, deductions, and capital gains regulations.

2-3 min8320 views

Limited Liability Company

Intermediate

A Limited Liability Company (LLC) is a business structure that protects its owners' personal assets from business debts and liabilities, while offering flexible taxation options.

13-14 min11545 views

Long-Term Capital Gains

Intermediate

Long-Term Capital Gains are profits from selling an asset held for more than one year, typically taxed at lower, preferential rates compared to ordinary income, making them a key consideration for real estate investors.

12-15 min36338 views

Long-Term Hold Strategy

Intermediate

A real estate investment strategy focused on acquiring and holding properties for an extended period, typically five years or more, to generate wealth through rental income, property appreciation, and tax benefits.

5-6 min5910 views

Loss on Sale

Beginner

A loss on sale occurs when an asset, such as a real estate property, is sold for less than its adjusted cost basis, resulting in a negative return for the seller.

3 min7932 views

Low-Income Housing Tax Credit

Advanced

The Low-Income Housing Tax Credit (LIHTC) is a federal tax incentive program designed to encourage the development and rehabilitation of affordable rental housing for low-income individuals and families.

12-15 min9961 views

Marginal Tax Rate

Beginner

The marginal tax rate is the tax rate applied to your very last dollar of taxable income. It's crucial for real estate investors to understand how additional income or deductions will impact their tax bill.

3 min21695 views

Material Participation

Intermediate

Material Participation refers to IRS criteria determining an individual's active involvement in a business or rental activity, crucial for deducting real estate losses against ordinary income.

13 min18614 views

Mill Rate

Intermediate

A mill rate is a property tax rate expressed as the amount of tax per $1,000 of a property's assessed value, used by local governments to fund public services.

12-13 min17934 views

Modified Accelerated Cost Recovery System

Advanced

The Modified Accelerated Cost Recovery System (MACRS) is the current tax depreciation system used in the United States for most tangible depreciable property, allowing businesses and real estate investors to recover the cost of assets over a specified period.

5 min17724 views

Modified Adjusted Gross Income

Advanced

Modified Adjusted Gross Income (MAGI) is a crucial metric derived from Adjusted Gross Income (AGI) by adding back certain deductions and exclusions, primarily used to determine eligibility for various tax credits, deductions, and investment-related tax rules.

8-9 min17886 views
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