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Landlording on AutoPilot, 2nd Edition by Mike Butler

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CHAPTER 23The Hidden TAX BENEFITSEspecially If You've Got a Job

  • Always Check with Your Expert CPA or Tax Advisor. This section is my opinions based on my experiences involving this topic.

This one topic blindsided me. As a good cop raised in a good, old-fashioned, traditional family in a blue-collar neighborhood, I did not realize I did NOT have a clue about how my investment activity would affect me in the income tax arena. Big words like depreciation, tax shelters, business expense, and “write offs” might as well have been some foreign language. I was totally in the dark. Looking back today, what was really scary was not knowing any of this didn't bother me.

I honestly believed the good, old, simple math was how the whole investing thing worked. Buy an ugly, broken house at a bargain price, fix it up, and rent it. I thought as long as my rent was more than my house payment, I was doing pretty good, and this was called “cash flow.” WRONG.

Here Comes My TSUNAMI! (A Good Thing)

If you will, jump into my shoes here for just a moment. Here's this guy, the long-haired, bearded, undercover cop who piddles part-time in real estate and NEVER works any overtime as far as police work goes. The other dozen or so detectives in your unit work all the overtime they can get, along with off-duty jobs, and look forward to tax time every year. They anxiously wait to get their TAX REFUND for their yearlong efforts. Many of these guys would get anywhere from $1,500 to as much as $4,000 or ...

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