How to Avoid Income Taxes (Legally) with Real Estate Investing
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- เผยแพร่เมื่อ 27 ก.ค. 2024
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🎙️ Episode 282 - If you make $100K in earned income, you may pay ~$30K in income taxes. But say you make that same $100K in rental income, you can (legally) pay $0 instead in taxes. Find out how and discover the tax form that every real estate investor should know.
📄 Show Notes: www.coachcarson.com/avoidinco...
🎬 Timestamps:
0:00 - Power of Real Estate
1:44 - Behind the scenes
5:11 - CPA firm + REI
8:42 - Rental vs. Earned Income
13:33 - Depreciation
20:07 - Passive Losses
23:42 - Cost Segregation
33:18 - Short-term Rental
38:20 - Real Estate Pro
44:18 - Buy & Hold Long-term
53:14 - 1031 Exchange
57:15 - Self Directed IRA
1:02:06 - Connect with Brandon
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Hi Chad, my wife and I heard you speak at end of 2023 at UCREA meeting in Greenville, SC. We have been investing and practicing long term holds for over 21 years, I turned 60 years old last week. This is excellent content. You and your guest CPA simplified the concepts extremely well. Pls keep posting this type of material especially for the young 20 and 30 year old investors as time is on their side and they will become very wealthy. Thank you.
By far one of the most beneficial videos to watch for real estate investors. Brandon is a CPA that all investors need on their teams! Already bookmarked the 2 plugs mentioned! Thank you Coach Carson!!
glad to hear it! thanks for watching.
No one mentions that the depreciation would be recaptured at the sale of the property. Depreciation Recapture Tax...?
They definitely said it. They said don't sell and your kids get to reset their basis after you die.
Exactly
This is a very productive discussion! Thanks
thanks for watching!
Great Job Coach! Very informative.
Glad it was helpful! thanks for watching, Dean.
Thanks for always publishing valuable and relatable content that is easy to understand
I appreciate the feedback!
Good stuff really appreciate your work!
This conversation and information blew my mind! Thanks for making tax stuff so accessible, you two.
I want to explore more Re cost segregation and also solo 401k’s and self directed IRAs.
Hearing two very experience investors who talk to lots of other investors say that buy and hold (or 1031’ing) is one of the best ways to achieve wealth is fascinating & reassuring.
Gr8 topic thx
It's especially interesting to hear about the various deductions and write-offs that are available for real estate investors.
Awesomely valuable! Thanks!
thanks for watching!
This is awesome thanks
Great episode.
Thanks gentlemen for the wealth of knowledge!
You bet! Glad you got something out it.
Sounds like a great concept to Airbnb or full-time W2 employees do you have a one-page PDF cheat sheet that we can share with our accountants to help them understand it and ask their opinion or do we have to go to you to do our taxes?
Thank you for the cheat codes ❤
This podcast just downgraded 3 months of recent self-learning anxiety about real estate investment taxes. Thank you, Coach Carson and Brandon Hall.
you're welcome! Thanks for the feedback and for watching.
I wouldn’t recommend a cost seg if you plan on selling soon. That amount gets recaptured as well. Also, a cost seg cost money and so the cost is not worth it for some investors.
Great listened until the end, recently divorced, split investments with spouse who was the realestate professional I was the 1099 employee. I now need to know the tax infor as he handled that part of business. Thx for filling in many holes.
Is one (landlord) able to write off one time special assessment relating to shortfall for insurance premiums? (Common assessment these days in FL). Thanks
Is it possible to use depreciation on W2 income?
If you form an LLC and the deferred 1031 tax is tied to the company, does personal death contribute to clearing out the taxes owed still?
Thanks for the videos, this is another great one. What do you think about getting condos for rental with low HOA?
thanks for watching. Condos can be good investments as long as you do your due diligence on the HOA itself. Make sure it's well run and doesn't have a bunch of looming repair expenses to pay that might increase those fees or cause a one time assessment.
@Coach Carson thanks for the response. Will do.
Can one claim depreciation for bathroom or exterior renovations like decks and porch?
Yes, you can. They just start in the year you do the remodel.
Hey coach I need to have a one on one with you , great video
Thanks for watching. I may open up some 1-1 slots soon since I'll have a little more time. Are you on my email newsletter list (coachcarson.com/newsletter)? That's where I'll announce it.
Me too, Coach. I'm interested on a one on one with you.
Great episode Coach! If I use a self directed 401k to fund my first property am I able to refinance or pull money out for another property?
There are loans out there for 401ks but they need to be non-recourse. Most real estate loans won't fit that requirement but you can ask around and look for private loans.
Again. What an excellent episode.
So as you carryover those losses as passive, how does it work when you finally become a real estate professional? As in, now that you are a pro, does any future income from a rental count as active and you can only offset those past year losses on new businesses that would be considered passive? Also curious if taking money out of a 401k would be considered active income or could you use passive losses from real estate to offset?
Maybe just some questions for a future episode.
Good questions, Rob. And I'm not sure on the answers. I'll see if I can tag Brandon to respond or answer in a future episode.
Great info great point of contact for a wealth of information and opportunity for doing business as we grow. Thanks coach!
Glad it was helpful!
Hey Coach, when you're constantly writing off depreciation for tax purposes, how do you then get more loans considering your income on the books is so minimal?
I don't get more regular loans is my answer. Residential lenders are the only ones who would ding you for having a lot of depreciation.
I've mainly used private lenders and commercial lenders, both of whom can look through the depreciation and see the real cash flow picture.
@@CoachChadCarson thank you so much for the reply, very much appreciated
Do you mind sharing your CPA in Greenville?
Brandon Smith - smithandshin.com/
Hey Coach! I’m looking for some free spreadsheets for real estate
No problem. Here's a free Rental Analysis Spreadsheet: www.coachcarson.com/rental-property-calculator-spreadsheet/
@@CoachChadCarson a
Tax preparer. CPA. Tax attorney. Many different titles, but most are not tax strategist. My first business which was not real estate, it was October and I asked my tax guy, hey it looks like I’m going to come in at 300K profit this year. Am I really going to have to write a tax check for 80K?
He said yep. I said but, if I created another LLC and my first LLC loaned my new LLC 200K to use as a down payment on 900K multi family I would only pay taxes on 100K right, his answer “well yes technically” Ok. I won’t be needing your services any longer. Jeez. You’re just gonna let me right that check? lol someone going to explain to me how Trump only paid $70” in fed Inc taxes legally? Well I figured it out. And why Biden LOVES S-Corps? Lol.
This is so confusing to me 😔
Is there anything in particular I can explain better or more?
@@CoachChadCarson wow! Thanks for Coach responding. Your channel has taught me so much ab REI.
It’s just taxes in general. It’s like rocket science for my brain 😂
@@MortgageFreeJourney Ha, Ha! Good analogy. It really is confusing at first. The good news is that if you learn little by little, it can make you money (more accurately saving in most cases). So it's learning that pays!
I made a video about the top tax benefits of real estate (th-cam.com/video/HCuIA1r1z_o/w-d-xo.html) and I wrote a similar article for the MadFientist.com if you want to read it (www.madfientist.com/tax-benefits-of-real-estate-investing/)
Best of luck and thanks for watching!
Monopoly is the most boring game in the world!
Do you have a favorite game instead?
Oh gosh, you are so nice to ask. I like a lot of different games, lately have been playing Backgammon! I just cant do Monopoly!