My last post generated an interesting series of questions I figured I'd answer in public rather by e-mail: (1) Always hire a tax professional to deal with tax questions. (2) Realtors do not give tax advice. (3) Realtors talk in "generalities" because it keeps us out of trouble. (4) My blog is entertaining to me. You are just along for the Wordy C ride. Sometimes you learn something interesting. Sometimes you don't. It's up to the individual to stick around or leave. I hope you stick around. If not, I forgive you. Disclaimers done (LMAO). ;-)
Types of Income:
Active: includes earnings from wages, salaries, commissions, bonuses and other payments for services.
Passive: taxpayer is not materially participating (e.g. rental income from a tenant).
Portfolio: includes earnings derived from interests, dividends, annuities, and royalties, etc. not derived from the ordinary course of business...
My advice, go directly to the IRS website for more information and the official publications: http://www.irs.gov/
To answer the rest of your questions and respond to your statements: It is, in my humble opinion and based upon my limited knowledge of my own life, up to you to decide how many streams of revenue you would like to have to maintain your lifestyle. When I share what I am doing, I'm sharing because sometimes people can learn from my mistakes and learn from what went well. Sometime people suggest things in the comment sections that I find useful, or funny or encouraging. If I post, it's because it is what I want to talk about. Nothing more than that.
I want to talk about buying land. I want to talk about passive income for my kids so they can have something when they grow up. I want them to have the option of keeping it, developing it or selling it off.
My parents brought several properties during their lifetime. I'm following in their footsteps. I'm reading my Trump University stuff and trying to do what I can with the resources at hand. I can buy more land than I can buy houses, so I will worry about building the homes later. That's just me...
You have to pull the IRS PDFs for a better definition that the cheap ones I've provided, then you need to hire a tax professional and attorney of your choice. After that, hire yor buyer's broker. Don't hire me because you want my version of tax advice. Hire me because you want to buy real estate. I'm part of a team, your team, not the whole team. I'm your real estate source, not your tax advisor. :-)
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