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In this way, owners can reduce their personal income tax liability because of tax losses produced by investment properties.
When real estate is operated wisely, this tax shelter almost always occurs during at least the first five years of ownership.
Before it gets too late for this year, you should maximize your tax position by paying all expenses possible by year end.
If possible you can even prepay items for next year.
By so doing you will reduce this year's tax liability, if any, or increase this year's tax savings.
In either case its worth doing.
The net effect will could well be equal to 30% to 35% of the amount you pay that you would not have paid without this reminder.
Tax shelter provides not only for an improved cash flow position, but it allows you to reinvest the monies saved for compounding returns, or for the reduction of debt by jumping down the amortization schedule.
Depending on the amount involved, this may save you years and years of interest payments.
This tactic provides for more rapid payoff of underlying mortgages and then the investment of what would have been debt service into other areas for portfolio development.
There is a lot than can be done over time with a little effort on your part right now.
Make good decisions and your real estate will provide you with the financial freedom we all desire.
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