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Published on: November 23, 2021 at
How to classify Real Estate for the purpose of Income Tax?
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How to classify Real Estate for the purpose of Income Tax?
There are 4 types of classifications. Of course, this is a very simplified breakdown of the different types. 1. Personal residences are non depreciable because they do not produce cash flows and personal residences are not owned for investment purposes. 2. Similarly, Dealer properties are not owned for investment purposes and do not produce cash flows, therefore they are non depreciable. It is a property owned by an intermediary such as a housing agent or a housing broker. 3. Investment properties are qualified as only the Raw land. Investment properties are not depreciable because raw land doesn't produce cash flows. Land is never depreciable and only appreciates with time. 4. The only type of property that is “depreciable” is the trade or business property. Or, it is also known as 12 31 properties in the US, because the type of property is governed under tax law section 12 31. In Canada, trade or business properties are simply known as Rental Properties, and are very common commercial real estate. ........................ Disclaimer. The content in these videos shall not be construed as financial advice. It is your responsibility to verify all information yourself. This is a Youtube video for entertainment purposes ONLY. Do not make investment decisions based on our videos. No copyright infringement is intended. Let's get rich. Let's finagle this bagel baby!
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