Real estate investors have long held two truths to be self-evident: First, investing in real estate, while not risk-free, is one of the most effective ways to build wealth over the long run; and second, one of the primary handicaps to building wealth through real estate investment comes in the form of taxes — more specifically, capital gains taxes.
Every time an investor sells an appreciated asset like real estate, Uncle Sam invariably requests a cut of the profits. And for most real estate investors, that unkindest of all cuts usually adds up to a robust 20% of the gain.
