Hello, studio owners, entrepreneurs, and fabulous women in business! Gather 'round, because today’s topic is hotter than a kiln at full blast. Spoiler alert: President Biden's budget proposal aims to close a major real estate tax loophole, and it's got more twists than a potter’s wheel.
Real estate investors, brace yourselves! The beloved 1031 exchange, a strategy that’s long been your best friend, is now on the chopping block. Imagine selling a property and effortlessly rolling your gains into a shiny new investment without paying taxes upfront. Sweet deal, right? Well, Biden thinks this indefinite interest-free loan from the government needs to end. Starting in 2025, you might have to kiss that advantage goodbye and pay up Uncle Sam sooner rather than later.
Let's break down why this change is a big deal. Currently, with a 1031 exchange, you can defer taxes by reinvesting the proceeds from a property sale into another like-kind property using an intermediary. This means you get to use all your sale proceeds for new investments instead of losing a chunk to taxes. Without this loophole, you'll have less cash to play with, which could throw a wrench into your growth plans faster than you can say "glaze firing."
Enter Donna Bordeaux from Calculated Moves. With her knack for simplifying financial management and helping businesses bake smooth financial systems into their DNA, Donna’s here to help you navigate these turbulent waters. If you're a business owner relying on real estate as part of your portfolio, it's time to rethink your strategy before the taxman cometh with both hands outstretched.
So, what exactly is a 1031 exchange? In simple terms, it’s a way to swap one investment property for another without immediate tax liability. This allows real estate investors to grow their portfolios without losing liquidity. But if Biden’s plan goes through, this advantageous strategy could become history, making it tougher for you to expand your empire without coughing up significant tax dollars upfront.
At pyop accounting, we understand the stress that comes with potential tax changes. We’re here to help you chart a course to smooth sailing and tranquil waters. Whether you’re building a community-driven studio or planning your next big investment, we're dedicated to creating a clear path to profitability and ensuring your business supports you just as much as you support it. After all, you’ve got better things to do than crunch numbers—like enjoying what you love and sharing your studio with the community.
Keep your eyes peeled and your ears to the ground as we monitor these developments. Donna will keep you informed on the latest and greatest news, ensuring you're always one step ahead. Remember, there’s more to taxes than being on time, and there’s definitely more to life than business.
Curious about how Biden’s budget proposal could impact your real estate investments and what strategies can help you stay afloat? Dive into our full article for the comprehensive scoop!
What other tax-related topics would you like us to demystify in future posts?
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Donna Bordeaux, CPA with PYOPAccounting.com
Creativity and CPAs don’t generally go together. Most people think of CPAs as nerdy accountants who can’t talk with people. Well, it’s time to break that stereotype. Lively, friendly, and knowledgeable can be a part of your relationship with your CPA, as demonstrated by Donna and Chad Bordeaux. They have over 50 years of combined experience as entrepreneurial CPAs. They’ve owned businesses and helped business owners exceed their wildest dreams. They have been able to help businesses earn many times more profit than the average business in the same industry and are passionate about helping industries that help families build great memories.
