Taxes And Using Credit
When I do my business with purchasing properties and fixing up properties, I 95% of the time use Lines of credits, credit cards etc; so the really only amount that comes out of my pocket is the payment that I make on it each month and then eventually I refinance a property and pay off these lines of credits with cash out. What I learned from my tax lady and just want to make sure she is correct. She said no matter if it is on a credit card or not, she still reports it as the entire amount as an expense out of my own pocket even though I really did not take any of my own money out of my pocket. Does this sound like the right way to do taxes? If this is the way the taxes work, it looks like I am in the hole and losing money, when really I am making a positive cash flow. Hope this makes sense. Thanks.
You answered my question. Thanks.
I would sell. I have been selling every two years it gets old after a while but I think it is the best way to cash out.
Having equity is nice, but only if you use it to advantage. You are blessed with options, some discussed above.
I have a couple of properties up in Fairfax County and need to sell one this fall to enjoy my capital gains tax exclusion. My plan is to sell it and buy two properties with the profit, putting my equity back to work.
The possibly tricky part is where and what to buy. SInce you want a personal residence, that makes one of the purchase decisions easy. Depending on how much you have left, there are many hot markets where you can buy, including the DC area.