buying real estate for tax shelter as a second home or a second property

Asked by Gita, Poway, CA Sat Mar 31, 2012

I am looking in to tax sheltered property. As I uderstand one has to rent it, one cannot buy it with any mortgage and there is a yearly appraisal of the property. Is this correct? How much does appraisal cost in Oceanside or in CA? Please provide any other info on buying a second home for tax shelter purpose. Thanks

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Sun Apr 1, 2012
A great way to buy investment property is to use and IRA. The property must be a rental and is held in a trust. It is still considered an IRA and collects interest and is tax deferred like a regular IRA. You can also get a loan for part of the purchase which is also managed by the trust. In essence you still have an IRA, just with a house as the investment. If you would like more information on this please contact me directly at
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John Linthur…, Agent, Carlsbad, CA
Sat Mar 31, 2012
This is a confusing question and perhaps needs elaboration? “Shelter' per say may be the wrong term. A second home and income property are treated different by the IRS. (You can not rent your 2nd home greater than two weeks etc. Also no deprecation and may be limited to interest deduction if all mortgages in your portfolio exceed a certain balance. Consult your tax adviser) Purchasing as an income producing investment may be sounder. You can offset losses against active income and deduct management expense, depreciate the investment per schedule, still have an interest and property tax deduction and generally be involved in a market that is heavily slanted in favor of landlords presently. Also you can 'shelter' any gain by 'trading' for like in future years. That said – call me regarding six 1br units across from the beach in south Oceanside. Be just over 1 million. Great starter investment John Linthurst 760 297 0771
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