Accepted Answer

Hello again,

If you purchased this through the C Corp, it could be done using dollars before your taxable salary is paid. But then you have the issue of double taxation the entire time the property is owned. And you have an even bigger tax bill at the time you sell the property. So that is really not advisable.

There really is no other way to purchase this with what you term "pre tax" dollars. The best overall way to handle the purchase is to set this up as a separate LLC. Your taxes on the income and eventual sale of this property would then be taxed to you personally. There is no double taxation as if the C Corp makes the purchase. You would also be able to write off all of your expenses each year, and reduce your other income by as much as $25,000 per year if the property generated losses on paper.

Your allowed deductions of course will include any mortgage interst, property taxes, insurance, maintenance and upkeep, and of course, the big one, which is depreciation. This could easily generate a tax write off each year for you of up to $25,000. Any additional losses can be carried forward and used in the year of the sale.

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Thank you again, and let me know if you still have more questions on this. I am happy to help you with whatever I can here.

Expert:	Merlo
Pos. Feedback:	99.8 %
Accepts:
Answered:	6/16/2009

Accountant

25+ years tax consulting. Specializing in returns for US citizens living abroad