Rental Property Tax Shelters: An Update

Of all investments that provide tax incentives, real estate is the most often used. Frequently, books and articles for the general public appear that feature titles such as “How to Make a Fortunte in Real Estate” or “Real Estate Investments Can Make You Independently Wealthy”. The way to make a profit in real estate investments has changed considerably during the last decade. There have been major changes in tax laws as well as the economic environment. This article will focus on investments in residential housing (i.e. rental property) as tax shelters. It addresses some of the critical considerations in the rental property investment decision, including the effects of the recent changes in federal tax law. A comprehensive example of a rental property investment demonstrates the effect of tax reform on the calculation of ROI.