Taxes and real estate

So, you decided to build a real estate portfolio in 2005 by acquiring an income-producing property...a rental property. Congratulations! Smart move on your part. Besides the equity-building benefit of your investment property, what other big advantage does it have to offer? Maximizing your tax savings. Yes, Uncle Sam will let you take advantage of him once again as long as the guidelines and rules are followed.Use a Schedule E to report your income and expenses on your tax return. Expenses such as mortgage interest, property taxes, HOA dues, insurance, repairs, utilities you paid, and depreciation can be deducted. You can even deduct necessary travel expenses you incurred whenever you visit the property. Of course, I am a real estate adviser not a CPA so you should consult a tax adviser when filing your return. He or she will know what to do to best serve your needs. Remember, in the end it is the IRS you will be dealing with so make sure you have a knowledgeable and ethical tax adviser on your side. Investing in real estate pays off not only through tax savings but also through the appreciation in market value of your property. For those of you who started your portfolio and looking to invest some more, you now possess the best retirement nest egg possible. For those who have not yet invested, it's not too late. Start building wealth now and invest in real estate.