Taxation derived from direct holding of the property

Taxation derived from direct holding of the property

Taxation derived from direct holding of the property


Hi everyone.
My name is Ido Neumann. I am an accountant (for businesses and investors) and a personal financial planner (for people)

My work is relevant to the group because I deal with investors on the Israeli tax side (both as investors, as investors and entrepreneurs), on the connection to the US investment finance (individual leaflets and projects in the millions) and on the financial planning side for people. Financial planning consists of investment, pension and insurance, and family law - and how it all fits together in the best and most appropriate way for you.

So I will raise the gauntlet that Lior raised today on the subject of giving value:

So today's value will be in a field that is close to all of us ... taxation.

There are a lot of investors, no matter where they work, who come to this issue towards the end of the year, towards the end of the preparation of the American report, and then they remember that the questions must also be reported in Israel.
Although the issue seems simple, in fact it is not because there are different routes derived from your first step as investors, your form of activity and the way you hold assets.

So today we will present one option of a tax track derived from a direct holding in the property, ie the property is purchased and registered on your behalf, not by your LLC. You'll be surprised, but there are investors who do this for a number of reasons, each with his own evidence.

Direct maintenance allows us to choose between tax routes: a track with a fixed tax rate and a track with a personal tax rate (according to the tax bracket I am in).

What does it mean to track a fixed tax rate?
This means that you are completing 15% on your income minus depreciation on the property.
Income does not mean profit, income and total guidance payments paid by the tenant.
Of the income paid by the tenant will reduce the depreciation of the house.
The result will be multiplied by 15%, which is what you pay the IRS in Israel.

Wait a minute .. Wait .. What about the tax you paid in the United States?
In this track, it will not be possible to offset between the tax paid in Israel and the tax paid in the United States, and each country will receive its share.

That sounds like a lot, but always check out the other tax options you can choose ...
And about that next post.

Last point as a bonus - this track has an exemption from paying for Social Security ☺
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