Question

Which of the following is true of real estate investments?

A) Real estate investments move in tandem with stocks.
B) Real estate investments are considered as active investments for income tax purposes.
C) Real estate investments lead to lower taxes due to tax shelter.
D) Real estate investments have less scope for financial leverage.
E) Real estate investments cannot be depreciated.

Answer 1

Real estate investments lead to lower taxes due to tax shelter.

Step-by-step explanation:

Out of the options listed, the true statement about real estate investments is C) Real estate investments lead to lower taxes due to tax shelter. Real estate investments can provide tax advantages through deductions such as mortgage interest, property taxes, and depreciation. These deductions can help lower the amount of taxable income from the real estate investment, resulting in lower taxes.