Deferred Real Estate Tax
Thursday, November 22nd, 2007There are three ways to hold or transact real estate in a way that tax can be deferred. Sometimes you can even defer that tax forever!
1. Installment Sale: If you sell a property over time, that is called an installment sale. In other words, you will receive installments of payments over time. Each payment you receive is composed of at least two parts: (1) principal and (2) interest. The interest received will always be taxable just like any other portfolio income. However, in the case of the principal, it will actually be only partially taxable, depending on how it is apportioned between gain and return of capital.
investment property