Many rent arrangements have been established using triple net leases. This means the vet practice, not real estate owner, pays all the property taxes and operating expenses of maintaining the building. This will add 3.8% tax on the net rental income to the owners’ tax burden in 2013 for those making $200,000-plus (single); $250,000 (married, filing jointly). Owners may be able to avoid this by changing to a gross lease. Practice owners may be paying more rent than they need to and adding unnecessary tax burden to their yearly obligations.

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There are tax changes that came into effect in 2013 where more than just the wealthy may feel the impact. There are new phase outs for itemized deductions. You no longer benefit from the entire amounts. Personal exemptions are also phased out for a deduction. Trying to push income below these thresholds will save tax deductions. A veterinary CPA can help you understand how to use the current tax law, with all its changes, to minimize tax burdens and build financial wealth. Many times it’s all in how you structure an event and avoid the landmines.

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Practice sales are strong with baby boomers seeing a better market. More corporate consolidators are also purchasing practices. Capital gains rates have risen for those who will have $400,000-plus of income (single); $450,000-plus (married, filing jointly). The increased tax rates have not slowed sales. The new strategy is to keep the yearly  income level below the income threshold for increased tax rates by utilizing installment sales where the capital gains are spread out over the collection period of owner provided financing.

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