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Tax Benefits of Setting Up a Personal Real Estate Corporation #shorts

6 Nov 2023 · 1 min

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Bob Gauvreau explains tax and bookkeeping implications after forming a personal real estate corporation. Key points: incorporating can enable a lower tax rate and allows you to choose the corporation year-end; maintaining separate, up-to-date bookkeeping (reconciling assets and liabilities) is required and more complex than personal tax filings; practical steps include opening a business bank account and using a designated business credit card, then giving those records to a bookkeeper to accurately record transactions so you maximize deductions and reduce deadline stress.

Chapters

You've just set up a personal real estate corporation and what does that mean for taxes? You made the first step towards achieving a lower tax rate. We get to choose the year end date of when we get to file. You also want to make sure though that you've now got up to date bookkeeping. It has to have all of its own separate bookkeeping and financial record keeping. It's a little bit more complicated than just filing numbers on a personal tax return saying here's my commission, here's my expenses. We actually have to reconcile assets and liabilities so bookkeeping becomes very important. Let's set up a business bank account inside the corporation, set up a business credit card or just use a designated credit card for the corporation. Give those to a bookkeeper and they can make sure all the transactions on those two accounts get recorded, reflected accurately. So you're maximizing your deductions and you're not stressed out about having to come up with all these financial numbers right at the deadline.