Real Estate

Front 1

real estate

Back 1

real estate

Front 2

Leverage

Back 2

the us of borrowed money to finance an investment, calculating a profit or loss will result not only from the investment but the borrowed money as well

Front 3

Tax shelter

Back 3

a phrase commonly used to describe an investment, such as real estate, sheltered by deductions for cost recovery, taxes, and interest

Front 4

limited partnership

Back 4

2 different classes of partners, 1 general 1 limited, general-unlimited liability, limited-limited liability, past-through taxes, Blue sky

Front 5

general partnerships

Back 5

joint venture, all partners manage control, unstable, liability unlimited, joint and several, past-through, too many managers

Front 6

C Corporation

Back 6

regular, managaged by board of directors, shareholders-limited, double taxation income tax and dividends, perpetuity

Front 7

S Corporation

Back 7

treated as partnership for tax purposes, sructured like corporation, stockholders taxed individually, capital gains pass to stochkholders with limited liability, no more than 100 shareholders

Front 8

Limited Liability Company

Back 8

best features of corporation, general, and limited partnership. members- limited liability and management participation, pass through

Front 9

Real Estate Investment Trust (REIT)

Back 9

at least 100 members, real estate investments, exempt from taxes if 75% assets invested and 95% of income distributed to investors who are not double taxed, normal income tax and eligible for capital gain, centralized skilled management, losses arent passed through, must register though Securities and Exchange Commission

Front 10

Sole Proprietorship

Back 10

one person owns entire business, flexible, east setup, only answers to oneself, 100% liable

Front 11

Capital Gains

Back 11

taxable profits from selling capital assets like rental property, land, equipment, stocks. Difference between the adjusted sales price and the basis of the property.

Front 12

Long term capital gain

Back 12

a capital asset held for more than 1 yr before sale
Long term gain X rate =tax, taxed at max 15% new rate
(wanted to reward long term)

Front 13

Short term

Back 13

a capital asset held for a year or less before sale
short term gain X rate = tax
taxed at ordinary income tax rate

Front 14

Basis

Back 14

an investor's initial cost for a real estate purchase. The dollar amount the Internal Revenue Service attributes to an asset in determining the annual gain or loss or depreciation on the sale of the asset

Front 15

Adjusted Basis

Back 15

the original basis, adding the cost of subsequent physical improvements

Front 16

adjusted sales price

Back 16

the sales price less cost of sale