Would like some imput on the following. Having come into some money via an inhertiance we now looking at investments more with an eye towards tax savings. It seems one of our few options are land. Knowing " location,location,location " is the primary concern if we can assume we will be guided by that the following are my concerns. Are not all interest and taxes write offs? If one enjoys improving and working on the land would'nt this a good past-time into retirement while building up equity ? Would this be a good way to diverse our investments? No more then 20% of our total portfolio would go into this venture. What other investment besides or with this would you recomend ? At this time we have 70% in a 500 index fund , 20% in a tax-exempt fund , 10% in bonds,CD's, cash. Will appreciate any and all suggestions. THANKS
Are not all interest and taxes write offs? No."We now looking at investments more with an eye towards tax savings...If you are looking at raw land, you might be sheltering appreciation but you might not acheive much in current tax savings. While the property taxes are deductible, whether the interest or any other costs would be deductible or if you would have to capitalize the costs, or if they would be considered investment interest expense - subject to limitations on deductions - are very much dependent on what you do with the land and your other tax "attributes."As always, I suggest that you don't let your investments be driven by the taxes. You should first decide what your investment goals are, identify a number of possibilities, THEN talk to a tax professional about the tax implications of the various investment opportunities.Then you can decide which of the alternative(s) best meet your goals.Gail~
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