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16 Cards in this Set

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  • Back
real estate
real estate
Leverage
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
Tax shelter
a phrase commonly used to describe an investment, such as real estate, sheltered by deductions for cost recovery, taxes, and interest
limited partnership
2 different classes of partners, 1 general 1 limited, general-unlimited liability, limited-limited liability, past-through taxes, Blue sky
general partnerships
joint venture, all partners manage control, unstable, liability unlimited, joint and several, past-through, too many managers
C Corporation
regular, managaged by board of directors, shareholders-limited, double taxation income tax and dividends, perpetuity
S Corporation
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
Limited Liability Company
best features of corporation, general, and limited partnership. members- limited liability and management participation, pass through
Real Estate Investment Trust (REIT)
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
Sole Proprietorship
one person owns entire business, flexible, east setup, only answers to oneself, 100% liable
Capital Gains
taxable profits from selling capital assets like rental property, land, equipment, stocks. Difference between the adjusted sales price and the basis of the property.
Long term capital gain
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)
Short term
a capital asset held for a year or less before sale
short term gain X rate = tax
taxed at ordinary income tax rate
Basis
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
Adjusted Basis
the original basis, adding the cost of subsequent physical improvements
adjusted sales price
the sales price less cost of sale