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Tax deductions are not the top priority for most individual real estate investors. They often work out of their home with no employees, other than those on-site at the property. Challenges (aside from tax deductions) include selecting what property to purchase, screening tenants, repairs, managing expenses, obtaining financing, and deciding when to sell. This articles addresses tax deductions sometimes over-looked by real estate owners. Tax deductions reduce taxable income but do not directly reduce taxes. For example, $10,000 in additional tax deductions will generate $3,500 in federal income tax savings ($10,000 X 35%), assuming a 35% federal income tax rate. Since most tax deductions require a cash expenditure, increasing actual expenses to increase tax deductions is not desirable. Let’s review fine-tuning the depreciation schedule and reclassifying existing expenditures to increase tax deductions. Real estate depreciation is a potent but underutilized source of tax deductions. Real estate depreciation schedules are commonly established by just separating land from the improvements. This is analogous to asking a world-class pianist to play a piano which is not tuned and has several keys which are not functioning. The results are just not as good as they should be. Congress has provided depreciation as a tax deduction to encourage real estate ownership and investment. Numerous court decisions have provided clear guidance for accurately and precisely depreciating real estate. Cost segregation can typically increase real estate depreciation by 50-100% in the first 5-7 years of ownership. Owners can claim a tax deduction windfall for properties owned more than one year by “catching-up” previously under-reported depreciation. After obtaining a cost segregation report, you can “catch-up” depreciation without filing any amended tax returns. Another meaningful source of tax deductions is to scrutinize any cash expenditures which are being capitalized. Have minor repairs been capitalized in error? Are there more significant repairs which do not clearly extend the life of a component? Discussing these items with your accountant can yield additional tax deductions. Also review items which were capitalized in prior years; can you claim any of them as current year tax deductions? Child labor can be good when they are your children and you claim a tax deduction. Consult your accountant or CPA but this can generate additional tax deductions of $5,000 per child, upon which they pay no taxes. (If they are feeling generous, they may return the money as a tax-free gift.) A tax-deductible vacation is an attractive option to make an expenditure deductible. Simply plan a vacation around a business trip for a meeting or seminar. Your airfare and hotel for the business period are deductible. Hotel before or after the business activity and your spouse’s airfare (assuming that your spouse is not involved in business) are not deductible. Half of meals during period with business activity are deductible. Reviewing personal expenditures can generate additional tax deductions. Items used for business such as computer, printer, office supplies, seminars, association dues, and business publications can be deducted. Long distance business phone calls can also be deducted. Self-employed persons can deduct the entire cost of health insurance premiums. Record keeping for tax deductions does take a modest effort. However, the federal income tax savings make it worth the effort. Cost segregation produces tax deductions and reduces federal income taxes across the country and in every size market. Below are just a few examples of cities where cost segregation generates meaningful tax deductions. City:

Las Vegas, NV
Boston, MA
Tampa, FL
Hartford, CT
San Francisco, CA
Memphis, TN
Miami, FL
Denver, CO
Phoenix, AZ
Orlando, FL
Boise, ID
Chicago, IL
El Paso, TX
Oxnard, CA
Rochester, NY
Cincinnati, OH
Jackson, MS
San Jose, CA
Fresno, CA
Charleston, SC
Omaha, NE
Oklahoma City, OK
Buffalo, NY
Albuquerque, NM
San Antonio, TX
Charlotte, NC
Allentown, PA
Austin, TX
Baton Rouge, LA
Jacksonville, TN Cost segregation produces tax deductions for virtually all property types, including the following: Property Type:

Used car lot
Research and development
Nursing home
Lumber storage
Truck stop
Tennis club
Hospital
School
Movie theatre
Lodging Almost every industry, including the following, can generate cost-efficient tax deductions by using cost segregation. Industry:

Golf courses and country clubs
Textile product mills
Nondurable good wholesalers
Durable good wholesalers
Real estate lesser
Electrical component manufacturing
Textile mills
Laundry facilities
Automotive parts distributors
Plastic and rubber products manufacturing

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Are continuously falling behind on mortgage payments? Have you received a foreclosure notice from your lender?  Would you like to avoid foreclosure process on your mortgage?

If your answer if yes to any one of the questions above, then you must read on. For I’m going intricate solutions that can help you avoid foreclosure on your mortgage.

When you find yourself falling behind on mortgage payment, do keep in mind to follow the 10 mortgage commandants that can avoid foreclosure.

10 mortgage commandants:

1. Don’t ignore the problem

It makes no sense to play a gentleman when the ship sinking deep. Admit your payment crisis! The more you try to mask calm and ignore a problem, the more harder will it be to avoid foreclosure.

2. Contact your lender as soon as you realize that you have a problem.

Remember this “Lenders need your Money; NOT YOUR HOUSE”. In reality, lenders appreciate it when you augment your fair reasons for falling behind on mortgage payments and are willing to re-negotiate mortgage terms, when you hit with crisis.

3. Open and respond to all the mail from your lender:

Be sure to acknowledge every mail from your lender. The first few notices are letters that carries first-class information that can avoid foreclosure especially when you are falling behind on mortgage payments. Later communications include important notices of pending legal action.  Your failure to acknowledge Lender’s email will stand an excuse in foreclosure court.

4. Know your mortgage rights:

It’s necessary to know your rights as a mortgagee. If you are particularly falling behind on mortgage payments, be sure to re-read the terms stated on the loan documents and you would have a fair idea on the foreclosure procedures practised by your lender. I would also recommend you contact the State Government Housing Office, so for You to gain understanding about your state’ foreclosure laws and timeframes.

5. Understand foreclosure prevention options:

Surf the web for options that are available for you to avoid foreclosure. One of the options that I’ve found highly the following links highly resourceful for helping homeowners.

Troubled Homeowner – is an organization developed to assist struggling homeowners.

6. Contact a HUD-approved housing counselor.

You can receive low cost (sometimes even funds free) housing counseling from the U.S. Department of Housing and Urban Development (HUD). The HUD counselors will acquaint you to all the laws relative to mortgage, help you organize your funds, and also arbitrate negotiations with the lender for you.  For more information contact a Housing and Urban Development counselor near your county.

7. Prioritize your spending.

Write down your all your expenses, concentrate of your core financial weakness and think-out of the box for solutions that will elevate your financial status. You can possibly cut down on less significant expenses so to make up for the funds needed for your mortgage payment. I would recommend you keep a financial journal with detailed entries of all expenses and credits. This will help you understand your spending pattern better.

8. Use your assets.

You could consider the option of selling a luxury asset like a car, jewellery or insurance policy, which can provisionally keep you away from falling behind mortgage payments. If there is a member in a family who can generate more income by taking a part-time job, do explore it. Though these efforts fail to craft a huge raise in your cash inflows, they can at least demonstrate your intentions and preventive attitude to avoid foreclosure on your mortgage.

9. Avoid foreclosure prevention companies.

It’s naive to pay fees to foreclosure rescue agencies, when you can use that same money to pay off the mortgage instead. Foreclosure rescue agencies are for-profit and they will seldom keep up with their promise to negotiate terms with your lender. However, if you are of an idea that you will need third party arbitration, consider contact The Troubled Homeowner Organization who may be willing to offer you the same services at either low or no cost.

10. Don’t lose your house to foreclosure recovery scams!

Do not sign any documents unless you fully understand the terms written on the contract. Many Foreclosure scams design equity skimming documents, which when singed will take over the title to your property and make you an renter in your very own home!  If you would like to avoid foreclosure try to get professional advice from an attorney, or a federal HUD approved Counselor.

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