Rent to Own and Get Tax Deductions ... and More!
What? Tax lease? Never heard of such a thing!
That is an understandable reaction. But the "tax lease" exists and you can take advantage of it with the North American Realty Services, Inc (NARS) Equity Holding Trustä (NEHTä ). This is a trust that is set up to hold legal and equitable title in a property.
Just imagine. You can "rent to own" and take the same tax deduction as if you were the actual outright owner of the property.
As the resident beneficiary in the trust (and renting the property from the trust), you can claim mortgage interest and property tax as income tax deductions, just as if you owned the property outright. Irrespective of the trust arrangement, the property is a "qualified residence" - See IRC 163(h)(4)(D).
As the taxpayer, all you have to show is:
As a resident beneficiary in, and renting from a NARS NEHTä , you will meet this test. Got doubts? That’s very natural. So have your CPA verify it. And if he or she has questions, a call to NARS at 1-800-207-4273 should satisfy them.
And look at your other benefits! Depending on the actual arrangement, here are the advantages of becoming a tenant in a "rent-to-own" trust arrangement.
Here is a matrix showing the benefits of the various ways of taking up a tenancy in a NARS NEHTä . Basically, you can stay a renter or, ultimately, become the full owner of the property upon termination of the trust.
SAMPLE MONTHLY PAYMENT GRID BASED UPON A $150,000 PROPERTY
|
NARS |
NARS |
NARS |
NARS |
NARS |
NARS |
|
Tenant Benefits |
|||||
|
A place to live Owner covers management and Maintenance costs Possession guaranteed for specific time period |
Monthly Rent credit ($200?) Right to buy at future discount Owner covers mgmt and mtce |
Tax write-off for owner’s interest and property tax Reduced after-tax housing cost (i.e., cheaper than renting) |
Full tax deductions Right to buy at discount Reduced after-tax housing cost (i.e., cheaper than renting) |
100% financing No bank qualifying Immediate ownership ½ principal reduction ½ appreciation Full tax write-off Can result in zero rental cost over term |
100% financing No bank qualifying Immediate ownership All principal reduction All appreciation Full tax write-off |
|
$1,075.00 |
$1,275.00 |
$1,325.00 |
$1,475.00 |
$1,500.00 |
$1,625.00 |
|
After-Tax Housing Expense |
|||||
|
$1,615.00 |
$1,912.00 |
1,325.00 |
$1,475.00 |
$1,500.00 |
$1,625.00 |
Find out more. Contact us.
Brunner & Associates
Tony Brunner 760-329-3850
Contact North American Realty Services, Inc at 1-800-207-4273.
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