Wow, great question Jonathan Villanueva!

Definitely a tough one to answer because taxes vary so much from person to person and I’m definitely NOT a tax expert. But a few quick thoughts…

  • The U.S. government does offer some tax incentives for real estate investors, but my impression is those are more for home owners than large scale real estate investors (I could be wrong about that!).
  • There are probably different tax implications for collecting rental income vs. selling properties for a gain.
  • Qualified stock dividends are often taxed as capital gains (typically 15%, but again, it varies by person) whereas rental income is usually taxed as regular income (higher tax bracket).
  • Stocks, mutual funds, robo advisors, basically anything investing directly or indirectly in stocks, tend to fall under the capital gains rules. Mutual funds are often tax inefficient whereas robo advisors pride themselves on smart tax strategies.

Bottom line, it probably depends on the individual investor’s tax situation, the country, the investment strategy, and more.

Again, I’m not a tax expert so this isn’t tax advice. But it’s a great question with a lot to consider!

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