About this episode
This week’s question comes from Brandon on the Real Estate Rookie Facebook Group . Brandon is asking: On a cash-out refinance , is this considered income? If so, will I have to report it on my taxes? Real estate investing provides a lot of tax benefits , some that new investors or everyday homeowners simply don’t know about. One of the greatest tax benefits ? No taxes on loans and liabilities! That means that the cash-out refinance can be done without paying any taxes on the cash given to you from the bank. But, there are a couple of ways that you could get snagged during tax season if you don’t follow the right steps. Here are some suggestions: Cash-out refinances are considered debt, not income , from a taxation point of view If you are planning to have your business pay you back for acquisition/renovation costs, be sure you make a record of that so you don’t get taxed on your repayment You may pay taxes on a cash-out refinance if you plan on taking profits from your business As always, consult a tax professional if you have any specific tax questions And more in the episode… If you want Ashley and Tony to answer a real estate question, you can post in the Real Estate Rookie Facebook Group ! Or, call us at the Rookie Request Line (1-888-5-ROOKIE). Links from the Show Real Estate Rookie Podcast Real Estate Rookie Youtube Channel Real Estate Rookie Facebook Group Rookie Reply: Cash Out Refinances vs HELOCs | Which Should You Use? Check the full show notes here: https://www.biggerpockets.com/blog/rookie-202 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Check out our sponsor page ! Learn more about your ad choices. Visit megaphone.fm/adchoices