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I pay over 200K per year in property and f&e taxes for state and local. If I stay alive and keep growing, I can see that figure being 1M one day.

After all that as a sub-chapter S, my actual tax rate is less than 23%

I think this national sales tax sounds great for salaried employee folks but for small time owner real estate developers like me....I'm skeptical.

Say I build a 2M fancy car wash. Between 5-7 year depreciation and interest on a 20 year AM @ 80% LTV for financing the venture and I pay no federal tax besides FICA and Medicare for about 7 years....and in the meantime I keep leveraging and growing and it continues....till you sell.

Then:

15% tax on increases in goodwill, land and non-compete
and 35% on equipment value increases...if any

all of which is asset allocation negotiations between buyer and seller and will likely be dealt with by my children or grandchildren

meanwhile, I make around 40-60% annually on my cash investment (the 20% of the LTV) and my property appreciates and I leverage my growing equity.

This is the very essence of real estate which is why I doubt many guys like me support this in it's current form.

I really hate paying property tax for horrid schools and then forking out for private school.

Dear wardaddy,

Ah, but under the so-called "fair tax," you will get to continue to pay property tax, local income tax, etc., because those are all local, and this tax merely replaces federal income and payroll taxes.

sitetest

Sorry, but I can't help you with the property taxes.

If you keep all this in your s-corp you would never pay any federal tax. And your children and grandchildren wouldn't have to worry about estate taxes. When you sell a property you don't have to worry about section 1031 tax free exchanges, because there is no tax due. That is true whether you are an s-corp or an individual. You don't need a depreciation deduction because there is nothing to deduct it from . You can pay yourself a salary out of the S-corp for you actual living expenses.

You just have to give up the old way of thinking. This is a new paradigm for the real estate industry. Can you give me an example without the state taxes involved, since that is irrelevant to our discussion?