Real Estate Forecasting: Income Taxes.

Property taxes are always included as part of operating expenses, and they're usually the only taxes that are included in cash flow forecasting for real estate. The reason corporate or income taxes are often not levied on real estate assets is because the structure of these investment vehicles is generally considered a pass-through by which income is passed along to the investors, and taxes are levied there. This means that real estate assets are not technically corporations, but usually, variations thereof that enable this double taxation avoidance. In the US, this form of corporation is often called an LLC, or a limited liability corporation, where earnings are passed through. Taxation is avoided at the corporate or entity level, but investors or members are granted the same veiling as corporations provide in terms of liability, provided that assets are not commingled. As cash flows are passed along to the investors in the form of returns or dividends, that is where the taxation will happen.