Month: January 2023

As you likely know, the Section 1031 tax-deferred like-kind exchange is one of the greatest wealth-building mechanisms for real estate investors. With Section 1031, you can avoid taxes on all your property upgrades during your lifetime and then pass the property to your heirs when you die. The heirs receive the property with a step-up to fair market value, and they can likely sell the property and pay no taxes. 1031 Exchange Overview The 1031 exchange, or like-kind exchange, has been around since the Revenue Act of 1921. Its purpose is simple: allowing you to swap a business asset without

Do you owe self-employment tax (Social Security and Medicare Taxes) on Airbnb rental income? That’s a good question. In Chief Counsel Advice (CCA) 202151005, the IRS opined on this issue. But before we get to what the IRS said, understand that the CCA’s conclusions cannot be cited as precedent or authority by others, such as you or your tax professional. Even so, we always consider what the CCA says as semi-useful information, so here’s some analysis that goes beyond what the IRS came up with. The Exact Question To be specific, the CCA asks whether net income from renting out