F&M Bank on LinkedIn: At F&M Bank, we understand the complex financial landscape businesses… (2024)

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At F&M Bank, we understand the complex financial landscape businesses navigate daily. That's why we're highlighting the strategic advantages of business owners forming a real estate holding company for the real estate their business occupies. Here's how this approach can benefit your business: Tax Benefits • Depreciation Deductions: Real estate entities can significantly reduce taxable income through depreciation deductions, offsetting the cost of buildings and improvements over time. • Interest Deductions: Mortgage interest payments on property loans are generally tax-deductible, offering substantial savings. • Property Tax Deductions: Deducting property taxes paid further reduces your taxable income, optimizing your financial outcomes. Asset Protection • Liability Isolation: Separating your operational business from real estate assets offers a protective layer against lawsuits or business debts, ensuring your investments remain secure. • Estate Planning and Succession: This strategic separation simplifies asset transfer to heirs and facilitates succession planning, ensuring business continuity. Financial Flexibility • Lease Agreements: Engaging in lease agreements with a separate real estate entity provides rent and lease term flexibility, crucial for effective cash flow management. • Raising Capital: With real estate as a separate entity, it's easier to raise capital through property sales, refinancing, or attracting investors, without affecting your operational business. Investment Optimization • Real Estate Value Appreciation: Isolating real estate assets allows owners to capitalize on value appreciation through refinancing or sale, without disrupting business operations. • Rental Income: Renting out unused property space creates an additional income stream, further enhancing your financial position. At F&M Bank, we're committed to providing the insights and support you need to navigate these opportunities effectively. Let's explore how we can optimize your business strategy together. * Consult your own tax advisor or Certified Public Accountant for specific information. F&M Bank is not a legal expert. Contact your attorney before making any decisions*

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