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2020 has been an interesting year for real estate to say the least. Different markets have responded to the pandemic in a variety of ways, some spiking and some dipping. There is positive news on the horizon though with the introduction of Bill 145.
In short, the bill amends the Real Estate and Business Brokers Act (“REBBA”), in a manner that will enable the formation of personal real estate corporations (“PRECs”) by individual real estate professionals. This presents realtors with the potential to benefit from tax savings, and opens up a number of portals for strategic planning.
Benefits, at a glance
Bill 145 has the potential to impact real estate professionals in the following ways:
Tax savings
Personal corporations have long been an effective tool for use in tax planning and wealth optimization scenarios. Forming a PREC can assist realtors in keeping more of their hard-earned cash. Tax savings will be particularly beneficial for high-income agents who have high-volume businesses.
Strategic planning
PRECs open up a world of possibilities in which realtors have greater options to tailor their wealth planning towards specific goals. Rather than reaching out to an accountant to file simple taxes, real estate professionals can now proactively create legacy wealth accumulation strategies that will tangibly assist in reaching their goals faster.
Retirement planning
Having freed up previously utilized taxation funds, real estate professionals have the option to place this money directly into a retirement fund. For those who are seriously considering an earlier retirement date, this faster-paced accumulation can make a big difference.
Get started planning today
Now that we know that Bill 145 will soon be receiving final proclamation, the time to begin planning is now. In reaching out to a professional before the law is passed, you can get properly structured as quickly as possible, and shield those commissions from personal taxes right away.
Small business owners have a lot on their plate. Particularly for realtors, the administrative end of the job can be time-consuming and even draining, especially in a practice with high sales volumes. Working with the professionals at Zeifmans, you’re able to pass the planning off to us. We’ll harness our decades of tax planning expertise to craft a plan that delivers your goals to you with accuracy and expediency, utilizing every benefit available to you within the Bill 145 introduction.
If you’re curious how a PREC could enhance your personal wealth, contact Zeifmans Partner Jason Price to start a conversation.
