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Special Internet offer
for the Real Estate Tax Handbook, 2008 Edition.

This is an "idea book" with highlights of tax rules and strategies that apply to real estate.

Here is a list of the chapters of the book:

1. Sale of a Principal Residence
2. Other Sales of Real Estate
3. Foreclosures, Deeds in Lieu of Foreclosure and Short Sales
4. Installment Sales
5. Tax-Deferred Section 1031 Real Estate Exchanges
6. What are the different forms available for real estate operations?
7. Depreciation and Cost Segregation
8. At-Risk Limitation and Passive Activity Loss Limitation
9. Deducting Mortgage Interest
10. Repairs – Current Deduction or Capitalized?
11. Family Limited Partnerships (FLPs)
12. Holding Real Estate In An IRA, Roth or Retirement Account
13. First-Time Homebuyer Credit

It is 118 pages of hard-hitting information, including references to IRS publications to access at the IRS web site. This is a "plain talk" explanation that doesn’t require a lot of tax knowledge, but will help you avoid unexpected tax traps.

The investment to buy this book at Amazon.com is $49.97. As a subscriber to Michael Gray, CPA’s Real Estate Tax Letter, you can get a copy for only $37.48, plus $3.47 sales tax for California residents and $3.50 shipping and handling. That’s twenty-five percent off! This special offer will expire on July 31, 2010.

"Finally a tax book written just for real estate investors! Michael has done a magnificent job of simplifying a complicated subject so even a beginner can understand the tax consequences of real estate deals before they have to pay huge penalties due to ignorance. It’s a must read."

Ron LeGrand
"The Millionaire Maker"
Real Estate Investing Teacher
Global Publishing, Inc.
Jacksonville, Florida

A great gift for your real estate investor clients! Real Estate Agents, Brokers and Trainers! Call 408-918-3162 for special pricing of bulk orders of 10 or more copies!

Fax the action form with your order today! (Or call Dawn Siemer at 408-918-3162 weekday afternoons.)

May your real estate increase in value!

Michael C. Gray

P.S. Remember, this introductory 25% off offer will expire on March 31, 2009. The investment for our new book, Real Estate Tax Handbook, 2008 Edition is only $37.48 plus $3.09 California sales tax for California residents and $3.50 shipping and handling. Fax the attached order form today, or call Dawn Siemer on weekday afternoons at 408-918-3162.

Table of Contents

i - Introduction

1 - Sale of a Principal Residence

Goodbye to those familiar old rules!

Some winners, some losers

The new exclusion amounts

Frequency of sales limit – ownership and use tests

Reduction of "second residence" and "non-qualified use" exclusions

Ownership and use of prior residences

Incapacitated taxpayers

Divorced taxpayers

Widowed taxpayers

Married individuals

Gain recognized for depreciation

Exclusion prorated

Certain expatriates

Involuntary conversions

Losses are generally not deductible

Repossession by seller

Observations

Transferring a family residence to family members at a discount

2 - Other Sales of Real Estate

Qualifying for favored tax rates

Capital gains and losses

Sales of real estate used in a trade or business or for rental

Section 1245 gain (ordinary income)

Section 1250 property (most depreciable real estate)

Other special types of real estate

Section 1231 Gains and losses for business property not taxed as depreciation recapture

Sale of depreciable property to a related person

Selling expenses

Earnest money deposits

Option to purchase

How to avoid paying tax for personal or investment real estate sales

3 - Foreclosures, Deeds in Lieu of Foreclosure and Short Sales

How are foreclosures (and deeds in lieu of foreclosure) taxed?

Tax relief enacted for recourse mortgage on principal residence debt foregiveness

What happens with a "short sale"?

What about selling expenses for a recourse mortgage?

Other exceptions for cancellation of debt income

What if the fair market value of the home has dropped after purchase?

Senator Grassley asks IRS to help homeowners with loan forgiveness tax bills

4 - Installment Sales

Planning benefits of installment sales

What is an installment sale?

Certain items treated as cash received in the year of sale

What property isn’t eligible for installment sale reporting?

How is the election made?

Why elect to not use the installment method?

Ordinary income from depreciation recapture isn’t eligible for installment sale reporting

Income subject to highest rate is taxed first

How the taxable gain is computed each year

Wrap around mortgages

Example with and without a wrap around mortgage

Like-kind exchanges

Sale of principal residence

Mixed property sales

Insufficient or unstated interest for installment sale note

Interest charge due to IRS for some installment sales

Repossessions

Sales to related persons who resell the property

Sale of depreciable property to a related person

Borrowing with installment sale note used as security

Contingent payment sales

Interest charge for sales by dealers of timeshares and residential lots

Suspended passive activity losses and installment sales

A corporate tax trap – the alternative minimum tax

Income with respect of a decedent

"Cutting Edge" estate planning strategy – installment sale to a "defective" grantor trust

Conclusion

5 - Tax-Deferred Section 1031 Real Estate Exchanges

What can be exchanged?

Tenants in common interests or "TICs"

Is an election required?

What about losses?

When must a gain be recognized?

Allocating basis for acquired properties

Non-simultaneous exchanges

Reverse exchanges

Sale of a principal residence acquired as part of a tax-deferred exchange

Installment sale reporting for like-kind exchanges

Cost segregation and like-kind exchanges

Related party exchanges

Like-kind exchanges of foreign and U.S. property

Vacation rental homes

Reporting like-kind exchanges

Conclusion – Get Help!

6 - What are the different forms available for real estate operations?

Sole ownership

Joint tenancy

Tenants in common or undivided interests

Community property

Estate planning trusts

"Title" trusts

General partnerships

Limited partnerships

Limited Liability Companies (LLCs)

Regular, or C Corporations

S Corporations

Real Estate Investment Trusts (REITs)

7 - Depreciation and Cost Segregation

Modified Accelerated Cost Recovery System (MACRS)

Expense election and bonus depreciation

Land v. improvements

Demolition of structure

Depreciation rules for different classes of assets

Foreign-use property

Alternative minimum tax

Cost segregation studies

Tax-deferred exchanges and involuntary conversions

Depreciation of the depreciable exchanged basis

Depreciation of the depreciable excess basis

Property surrendered wasn’t depreciated using MACRS

Election to not apply rules for replacement property

8 - At Risk Limitation and Passive Activity Loss Limitation

At Risk Limitation

Passive Activity Loss Limitations

What are separate activities?

Rental real estate activities

Real estate professionals

Rental of nondepreciable property

Net income from rental to related entity

Self-charged interest

Rental of residence

Material participation

Limited partners and LLC members

Publicly-traded partnerships

Passive assets and estate tax deferral

9 - Deducting Mortgage Interest

Types of interest

What is a qualified indebtedness for the acquisition or improvement of a residence?

What happens when you refinance a mortgage secured by a qualified residence?

Refinancing rental properties

Refinancing through passthrough entities

Points

10 - Repairs – Current Deduction or Capitalized?

Rehabilitation

Painting

Hazardous waste cleanup

Roof repairs

Proposed regulations

11 - Family Limited Partnerships (FLPs)

The benefits of lifetime giving

Caution!

Family wealth planning using a family partnership or LLC holding real estate

Using entity fractionalization for investment assets

What the IRS doesn’t want you to know

Properly implementing a family wealth plan is a worthwhile investment

When does entity fractionalization make sense?

12 - Holding Real Estate In An IRA, Roth or Retirement Account

Roth accounts – special benefit power

Who will be the trustee/administrator of the plan?

Unrelated business income

Unrelated debt-financed income

Prohibited transactions

13 - First-Time Homebuyer Credit

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