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(continued) – Shelter ine from taxes if you have a large mortgage interest is deductible – Possible hedge against inflation. Be aware of possible real estate ―bubbles‖ – Housing prices have tumbled across the country with some of the hardesthit metro areas being Tampa, Detroit, and San Diego 174 ? Your vacation home – Tax advantages depend on if the IRS views it as your second home or as a rental property – If you don’t rent it more than 14 days a year you can write off mortgage interest and property tax – Primary reason to own a vacation home is because you want to use it Investing in Real Estate (continued) 175 Investing in Real Estate (continued) ? Commercial property – Land and buildings that produce lease or rental ine – Most mon investment of this type is a duplex or small apartment building. It also includes hotels, office buildings, stores, and many other types of mercial establishments 176 Investing in Real Estate (continued) – Will ine be greater than expenses? – Tax deductions, such as depreciation and property taxes are limited to the amount of rental ine you receive ? Passive activities and passive losses 177 Investing in Real Estate (continued) ? Undeveloped land – Can be tremendous gains but this type of investment poses enormous risks. All the money is riding on a single parcel of land – Most people buy land with the idea of subdivi