www.smartdivas.com

There are several ways to benefit off of owning property and being involved in real estate.  Not only does this come from finding the right property, loans and people to work with, but also moves into finding the best ways to save money while you own a property.  One of the well known ways to save an extra dollar is by becoming involved in a 1031 exchange. 

A 1031 exchange is a specific tax form that can help with the profits and losses that you have received for the year.  They are usually used for those that own extra real estate property as an investment.  This form will allow you to roll-over the profits that have been made from a sale made from a real estate property.  From here, you can purchase another property instead of paying the tax back on the property that was already purchased. 

The major benefit of a 1031 exchange is that it allows for you to be able to delay specific taxes and instead invest into other properties.  If the property is invested in, then the taxes that are taken from capital gain will not be used later on.  A second benefit to a 1031 exchange is that it allows for more equity to be a part of the investment.  Because of this, each time you invest in a new property from the 1031 exchange, the properties will gain a higher value. 
(more…)

While many businesses assume that accountants are bound by generally accepted accounting practices and that these are inviolate, nothing could be further from the truth. Everything is subject to interpretation, and GAAP is no different. For one thing, GAAP themselves permit alternative accounting methods to be used for certain expenses and for revenue in certain specialized types of businesses. For another, GAAP methods require that decisions be made about the timing for recording revenue and expenses, or they require that key factors be quantified. Deciding on the timing of revenue and expenses and putting definite values on these factors require judgments, estimates and interpretations.

The mission of GAAP over the years has been to standardize accounting methods in order to bring about uniformity across all businesses. But alternative methods are still permitted for certain basic business expenses. No tests are required to determine whether one method is more preferable than another. A business is free to select whichever method it wants. But it must choose which cost of good sold expense method to use and which depreciation expense method to use.

(more…)