Hack your USA tax return with these 5 smart questions

March 15, 2015

April 15th is fast approaching. Are you prepared?

Accountants exist to minimize your tax bill. This holds true for both your Australian accountant and your US accountant. If you are simply “just filing your taxes” and not asking questions, then it’s a safe bet that you are not maximizing all of the legitimate benefits available to a USA real estate investor.

Owning investment property must always be treated as a business. As a proactive investor you must embrace the fact that your growing a USA property portfolio is synonymous with building a profitable company. Learning the different ways to leverage tax regulations in your favor is the investor’s responsibility and your skilled accountant will help when you ask the right question.

Your accountant’s roll is to provide you with a strategy to utilize all of the legitimate tax benefits available to you and your unique set of circumstances. Get in the habit of asking your accountant questions. Don’t assume that your accountant knows what you are thinking. You are responsible for sharing the big picture with him.

Want to pay less tax? Here are 5 questions you must ask your US accountant to hack your American tax plan;

  1. What is the best way to handle my asset depreciation? Ask your US accountant to explain strait line depreciation compared to accelerated depreciation.


  1. Should any improvements that I make to a property be capitalized and then deprecated or can they be expensed? Is the best strategy for you to capitalize versus a currently deductable expense? Your accountant will explain the difference.


  1. What are the tax planning considerations if I am planning to sell one of my properties? For example, if you are going to receive a significant capital gain how do you plan to minimize the tax consequence? Some investors elect to defer large capital gains with an installment sale. Keep in mind that more money now may also mean more tax owing now. Since your tax situation will be forever changing, it is important to keep your accountant up to date with you current and future USA real estate investment plans.


  1. Am I able to withdraw equity from my USA property portfolio in tax-free cash? In most cases, when you borrow money it is not classed as income. Check with your US accountant to lean more before you refinance.


  1. Ask your US accountant about the advantages of a 1031 Exchange. If you are planning to sell one of your USA real estate assets to acquire a new property, the 1031 Exchange can allow you to defer your tax.


Accountants are the foundation for growing a profitable real estate portfolio and multiplying your wealth. Remember that income follows assets. Your accountant’s job description is to minimize your tax obligations. Your goal must be to keep more of what you earn.

Real estate investing is a team sport and accountants are one of the key players. Use this American tax season to have a conversation with your US tax professional and make sure that you are maximizing the benefits of your USA real estate holdings.


Invest well,

John Carney