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  • Saving taxes on high end home

    Also posted on facebook: Saving property taxes with high end homes - For homes in the 2-4 million range or greater, are there any corporate structures that can allow use to deduct property taxes or interest to reduce federal taxes. C-corp, s-corp, using the home for business, etc. Especially if we use a portion of our home for business. I am not talking about the normal home interest deduction or home office deduction.

  • #2
    i want to hear what FB had to say...

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    • #3
      Originally posted by Peds View Post
      i want to hear what FB had to say...
      ha ha
      or IRS

      OP, so is it a home or a business site?

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      • #4
        Originally posted by G View Post

        ha ha
        or IRS

        OP, so is it a home or a business site?
        Anecdotal problem. If you build living quarters in a business location, the residency permits and inspections are different. You may not like which one the shut down or the remedies.

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        • #5
          You can cut the taxes on a 4M house in half by buying a 2M house.

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          • #6
            I would never buy a 4 million dollar home even if I could afford it because the property taxes and maintenance would be a huge drag on your cash flow. I can't even imagine what a 4 million dollar home looks like now that I think about it unless it is some penthouse in Manhattan or some sprawling estate in LA. The physical cost of building the property is much less then the 4 million that anyone is paying for it then, the price just becomes super-inflated due to hyper-demand for the location or land.

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            • #7
              you are not talking about the HO deduction, so that’s out the window. If this is your personal home, then a corporate (business) structure w/n/b appropriate. Besides, it’s almost never a good idea to put an appreciating asset into a corporation. For starters, you lose your $250k//person gain exemption at sale and, if/when you trsf it out of the corp, you pay taxes on any gain, even when simply retitling and not selling.

              I’m not sure I have the full picture, though, as it appears the original question is purposely obtuse.

              But, hey, I’ll defer to FB. Any brilliant ideas? I love to learn.
              Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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              • #8
                I think the only way would be if you had a ‘farm assessment’ and could thereby lower property tax burden

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                • #9
                  Generally speaking, the answer is no.

                  if it is really your home there are a few tax moves, but none involve corporate structures to own the home. Legitimate home office expenses are deductible. If you do the original method that includes a portion of the total expenses, though I find it is not worth the effort compared to the simplified method. WCI shared a clever move to rent his home to his business for legitimate uses (e.g., a work based social event), which generates a business deduction and tax free rental income. There are restrictions- primarily less than 14 days a year. But no LLC, S-Corp, or C-Corp structure helps with home taxes.
                  Last edited by Larry Ragman; 01-24-2021, 09:57 AM.

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                  • #10
                    In my state the real estate tax rate on business properties is double that of residential.

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                    • #11
                      1) No.
                      2) Don’t buy a home that expensive.
                      3) Don’t read anything on Facebook with respect to personal finance and/or taxes.

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                      • #12
                        I think you are stuck with the property tax rates as assessed. Assessed values for homes you construct tend to be lower than those you buy and have a set sticker price, at least in my area. However you can have some mild benefits with increased mortgage tax deductions. It's a bit over my head but if you have 4MM investable assets which you should if you are buying a house that expensive you can put all of those in a separate investment account in an amount equal to the mortgage and then as long as you keep it separate it's all tax deductible. Needs a good CPA to keep straight and ask about interest tracing rules.

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                        • #13
                          You could buy the house with a Corp that you own, and then rent it from the Corp, similar to what I do for my business. My practice rents space from a partnership which owns the real estate. But I dont think it would save any taxes, just a different entity would be paying the same taxes.

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                          • #14
                            Originally posted by hillaj1 View Post
                            1) No.
                            2) Don’t buy a home that expensive.
                            3) Don’t read anything on Facebook with respect to personal finance and/or taxes.
                            4) Don't read anything on Facebook.

                            Comment

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