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Tax Preparation

Direct Real Estate & Private Equity

What are Direct Real Estate & Private Equity? 

Direct Real Estate and Private Equity are both forms of investments in privately-held, pass-through entities. Direct Real Estate occurs when an individual acquires ownership in an entity that directly owns a real estate asset. Private Equity is a more broad classification of private investment, as it simply involves capital not listed on the public market and typically invests in private companies.

What are the advantages of Direct Real Estate & Private Equity? 

These investments are typically structured in the form of limited partnerships, which protects owners from liability of the operations (up to their extent of ownership). While these investments carry risk, they tend to be less correlated to the overall stock market, which can provide diversification to your portfolio. Furthermore, because these investments are in operations that typically last for 2 or more years, many of these investments have the time and space to create a longer term income stream. Finally, most expenses, credits, and losses that these entities experience will flow through to the investors in the form of tax write-offs that can be used at the investor’s individual income tax return.

Who qualifies & why should you adopt?

Individuals with a high appetite for risk and who are interested in building a supplemental income stream can consider exploring Direct Real Estate or Private Equity.  It is important to understand that these investments are not suitable for all investors and there is significant risk of loss of principal.  Private placements in general are speculative, illiquid, and carry a high degree of risk - including the loss of the entire amount of the investment.  All risks should be reviewed in detail with your financial advisor prior to making a decision to invest.

This is not an offer to buy or sell any securities or perform a specific strategy. Please consult your financial advisor before exploring these opportunities. 

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