Heroic Investing
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HI 85 – Real Estate Investors & Their Taxes with Mike Murphy

Episode: 85

Guest: Mike Murphy

iTunes: Stream Episode

Gary Pinkerton starts off the show talking about one of the powerful things about real estate investing, depreciation. The tax reform of 2017 has changed the game for real estate investors and their tax returns, thanks to changes to things like depreciation.

Then, Jason Hartman talks to Mike Murphy of Murphy, Murphy, & Murphy about a topic that is near, dear, and feared by property investors – real estate taxes.

There’s an old saying, “Nothing is certain but death and taxes.” Taxes are a fact of life. Although the prospect of dealing with taxes is not especially appealing, Jason has been extolling the tax benefits associated with rental real estate for years. As America’s most tax-favored asset, it can put money back in your pocket (or keep it from ever leaving in the first place) better than anything else.

An important point Murphy makes early is that an investment property is broken down into two components: land and the structures on the land. While the cost of the land itself isn’t tax deductible, the structure is, which means the residential building you buy in order to rent out to a tenant. Tax breaks flow from the structure, and here are several you need to understand as an investor.