Cheers for this, been searching for "passive income investments" for a while now, and I think this has helped. You ever tried - Qonmily Passive Formality - (do a google search ) ? Ive heard some amazing things about it and my brother in law got excellent success with it.
@@RedactedNews Would I have to take a loss if I pay cash for a property? Or can I write off most things and not have to pay any tax on the rent money I get from tenant?
Hey, can you claim a tax deduction on the land you rent to park your RV on each year and it's considered your primary dwelling spot? The Rv is also fully owned by me. Is this allowed?
@@johnvigil8440 Dave Ramsey would never give advice like that. His advice is stick to beans and rice, cut up credit cards and buy rentals with cash…. He’s a clown
I'm new to RE investing but I will always remember that quote "If you're paying any taxes as a real estate investor you're doing something wrong" That quote will be in my head every year at tax time during my RE investing journey to guide me in doing this right. Thanks.
I'm going to take a class on preparing taxes, and there are about 6 levels to achieve to be a professional tax consultant. This really is an eye-opener for me. Thank you 😊 so much?
Your accountant is correct... Below is an great example I found: The basis of property you inherit is usually the property’s fair market value at the time the owner died. Thus, if you hold on to your rental property until death, your heirs will be able to resell it and pay little or no tax-the ultimate tax loophole. Example: Victoria inherits her deceased parents' home. The property’s fair market value (excluding the land) is $300,000 at the time of her uncle’s death. This is Victoria’s basis. She sells the property for $310,000. Her total taxable profit on the sale is only $10,000 (her profit is the sales price minus the home's tax basis). The basis of a home or other property you receive as a gift is its adjusted basis in the hands of the gift giver when the gift was made.
not a CPA but most times if the contractor can split the bill in Labor and materials you should be able to list it in the first year but check with your tax adviser or require the total roof repair to be made in 3 separate repair bills for 1st or 2nd year recoup. just saying
I was just listening to the Rich Dad Poor Dad podcast on depreciation and searched on youtube for more elaboration and it was Morris invest who they were speaking too.... so wow small world. Thanks for the valuable video!
The FICA is what kills me lol. I have a small office rental. It brings in $32,000 a year. I pay the triple nets, dumb i know lol. After deductions im around $22,000 self employment income. 15.3% of that is still a lot.
So glad i saw this, have neen doing this on my personal taxes since our first house became a rental. Inly one i need to keep better track of is my mileage when i drive by to see how the place is looking.. thanks for the list
Roofs are considered an improvement (as an a capital improvement) & therefore Subject to the depreciation table not as a wholesale whole number deduction.
WoW!!! I am not real estate owner...yet but I would LOVE to become one. I aways have wanted to own rental property. It has been sooo worth the low cost to become a subscriber to your "channels" (sorry, I don't know what else to call it.) I am really looking forward to learning more Clayton. Thanks ooodles!! Happy New Year!! 🎉🎊 May the new year improve, for EVERYONE!! 💜🌷
I own commercial real estate, so I am familiar with depreciation. Repairs and improvements are different things. It may well be that the IRS is not a stickler about these, but they are distinctly different and it sucks for me to have to pay for a buildout for a new tenant and not be able to claim it right away, but have to amortize that expense over the life of the property.
It benefit you because Capital Improvements even though they are depreciated they reduce your taxable income But A mortgage lender can add them back in to your qualifying income to help you buy more property
From talking to my friends that own rentals that your better off buying a multi unit rentals like a duplex I currently own a single family home as a rental
I have a question that i look all over the internet and i cant find the answer. I hope some one here have the answer . The depreciation is calculated from the money ypu have left after expenses like mortgage and water bill . Example I charge rent 1k per month x 12 is 12,000 a year ypu use this amout or you use the amount left after expenses like i charge 1k per month but i pay 50 for water and 600 fpr mortgage i have left 350 per month x 12 is 4,200 per year. Which one you use yo calculate depreciation please some answer ???????
Print off a sch e and it will list your real estate expenses. An 8829 also if you use a home office. I forget but i think an llc is a 1065 partnership return. Not sure but if you make an llc you will report your real estate there. Key though get a sch e form.
I plan to buy another house and rent out my current home. Can I put it in an llc and write off the repairs it needs to get it ready for a rental. Repairs are minimal painting, deck repair and new roof.
1. How do u get properties on LLC / Corp. 2. How to make the bank do that as in most of the cases they don’t agree on this as the mortgage is taken in the name of the owner / spouse .. 3. Is depreciation on asset mentioned by u applicable in Canada ... thanks
The mileage credit is ridiculous! For example, I know people who use a service to accept rent and of course there's a fee. I have 3 local properties so I can drive, pick up the rent, and stop in the place I was undoubtedly going to drive to anyway for lunch because it's on the way. Now instead of paying a service 2% or 3% I get all of the money, an opportunity to visually inspect the property (last time on one I realized I need to clean the gutters), and the drive itself becomes a profitable trip at tax time.
All this applies to a single home 🏠 and I just buy another single home which I’m living in it any reforms or additions like a privacy fence counter tops...etc would that add value to the house and I assume since I’m living in it I won’t be able to claim it on this years taxes?
You can only save on taxes for the income from the real estate property. which means if you have a regular job, you still have to pay taxes on those income and you cannot claim rental expenses to reduce your taxable income that came from your regular job
I was wondering how deductions apply to purchasing a new property. From what I understand, you can’t deduct start up costs. Is this correct? If so, if the previous tenant is in the house after you close, and move out after a few days, are you then able to write off start up costs? I’ve also read where a loophole is to list the property for rent day one, even though it’s not ready to be rented.
I recently created an LLC, for a reason other than property ownership and only lately decided that i wish to buy and rent out homes. My question is should i buy those properties under the said LLC or under my personal name. Thank you
Thank for your videos!! I recently purchased my first property and am renting it out while traveling for work. This is my first year owning a rental, so I only have one. I am trying to figure out how to do the taxes myself and am unsure about what to put for depreciation. This is my main question right now. Does the 27.5 years start the year you purchase? Do I put $0 in those spaces for “before and after 1997” since I just bought the property? Or do I have to calculate it using the fair market price/appraised value? So many questions. Thanks!!
I wish I could deduct a new roof as an expense in the current year but it needs to be listed as an improvement and depreciated over the expected life span of the improvement.
You don't need to have a business to own Rental Property. Altho some Cities requires a Business License such as Central, S. Carolina. Some cites don't require a licenses but require you to pay a fee on the refrigerator, washer, dryer which gets depreciated until zero like Lehigh Acres, FL. Some cities don't require anything like Benton, AR or Lawndale, CA.
Amazing video thank you I have a question obviously there is a difference in tax benefits between baying house where you gona live and baying a income property Can you point out some or all the differences between those And what is difference if you bay income property a duplex and you live in one appartment and rent another one Thank you
Linzay Kelly repair: replace broken stove, fix hot water heater, replace broken faucet etc Improvement: add privacy fence, add backsplash in kitchen, add wooden blinds, put in fancy new faucet in kitchen
could you write off a shower replacement if the current shower is leaking and needs to be removed for water damage inspection? The current shower is also designed for someone with a disability and I currently rent to a small family with a child that requests I replace the faulty shower with a tub if possible.
would I be correct to assume that a new shower or tub stall would constitute a replacement and not technically a repair? Or would this situation be some what different considering the leak and potential long term damage that could occur if not dealt with. e.g. serious water damage, mold problems such things that could lead to long term health problems and maybe even the floor caving in? Water also effects the family's ability to do laundry as it leaks directly above their laundry area.
Do you suggest I get an LLC on my first property investment? I am purchasing my first property in my home town (just miles away) as my first real investment! I’m very excited and a bit scared at the same time.....
I'm buying my first home which is a 2 family. I plan to live on one floor. Since I'm living in the property also... Is half the bank loan interest and half the property tax I pay deductible? Or can I deduct all of it?
Can I as an investor of a rental property write off expenses for initial rehab of a house and the contractor’s work on the house? Your videos have been extremely inspiring and informative. Hope to get out of the rat race soon.
Only as a capital improvement which gets prorated out over 27.5 years. This guy was wrong when he stated you can deduct a roof. The only way you get away with that is if you don't get audited!
So I have a 9-5 job and I'm at a high tax bracket. My personal income tax is usually around $20k. Will investing in real estate offset my personal income tax or is it just for taxes in the real estate business?
Very concise unlike a lot of other videos on the rental properties. Good job
Thanks so much!
Cheers for this, been searching for "passive income investments" for a while now, and I think this has helped. You ever tried - Qonmily Passive Formality - (do a google search ) ? Ive heard some amazing things about it and my brother in law got excellent success with it.
@@RedactedNews Would I have to take a loss if I pay cash for a property? Or can I write off most things and not have to pay any tax on the rent money I get from tenant?
In this pandemic
Mortality and digitalization is be enormous
Less demand means less value of property
SO REAL ESTATE IS NOT A GOOD INVESTMENT,NOW
Hey, can you claim a tax deduction on the land you rent to park your RV on each year and it's considered your primary dwelling spot? The Rv is also fully owned by me. Is this allowed?
It's very nice to get all this info without anyone yelling at me.
KidCity Lynnwood haha Dave Ramsey got u shook?
Lol no *BEN MALLAH*
Not to mention it's free advice 😀😀😀😀😀😀
@@johnvigil8440 Dave Ramsey would never give advice like that. His advice is stick to beans and rice, cut up credit cards and buy rentals with cash…. He’s a clown
I’ve met DR in person, he’s even less kind face to face than on the air.
I'm new to RE investing but I will always remember that quote "If you're paying any taxes as a real estate investor you're doing something wrong"
That quote will be in my head every year at tax time during my RE investing journey to guide me in doing this right.
Thanks.
I'm going to take a class on preparing taxes, and there are about 6 levels to achieve to be a professional tax consultant. This really is an eye-opener for me. Thank you 😊 so much?
Way to go!
Hate taxes..great info..thanks!
Morris is phenomenal in his approach to this spectacular subject! So fortunate to have found channel!!
+PR Riches thanks so much.
Your accountant is correct... Below is an great example I found:
The basis of property you inherit is usually the property’s fair market value at the time the owner died. Thus, if you hold on to your rental property until death, your heirs will be able to resell it and pay little or no tax-the ultimate tax loophole.
Example: Victoria inherits her deceased parents' home. The property’s fair market value (excluding the land) is $300,000 at the time of her uncle’s death. This is Victoria’s basis. She sells the property for $310,000. Her total taxable profit on the sale is only $10,000 (her profit is the sales price minus the home's tax basis).
The basis of a home or other property you receive as a gift is its adjusted basis in the hands of the gift giver when the gift was made.
In most cases a new roof on a property would likely have to be depreciated over time and could not be deducted all in one year.
not a CPA but most times if the contractor can split the bill in Labor and materials you should be able to list it in the first year but check with your tax adviser or require the total roof repair to be made in 3 separate repair bills for 1st or 2nd year recoup. just saying
Yeah, a new roof is not a repair it's a capital improvement so can't be fully written off on first year. Really curious how you don't know that.
I was just listening to the Rich Dad Poor Dad podcast on depreciation and searched on youtube for more elaboration and it was Morris invest who they were speaking too.... so wow small world. Thanks for the valuable video!
Love that!
Thank you!
This is the best video I've ever seen. Thanks Morris.
+LYIRICSMAKINGSENSE Thank you so much!
Morris Invest thank you for the inspiration.
Excellent Advice!!! I'm glad that I have found your channel.
+The Chose One Out of them all Glad you're here!
The FICA is what kills me lol. I have a small office rental. It brings in $32,000 a year. I pay the triple nets, dumb i know lol. After deductions im around $22,000 self employment income. 15.3% of that is still a lot.
land is appreciating, building is depreciating (just much slower than the depreciation rate of your taxes)
Very clearly explained. Really helped me understand how this works. THANK YOU!
That's great! Glad you liked this one.
Thanks for redirecting me here! Very Informative, I will definitely be commenting and liking more of your videos, cheers
+Team Salwan Awesome, thank you! Glad you found it helpful.
I'm so pumped and ready to buy my first multi family unit this year this is great info thank u
did you buy your megamultifamilyunit bra
@@CC-jy4gr Ya. How is it going?
@@superstarr310 sup punk
LOL on the nap at the desk. I've done that way too often...sometimes with hands resting on the keyboard.
Very informative, Thanks a lot!!
Glad it was helpful!
So glad i saw this, have neen doing this on my personal taxes since our first house became a rental. Inly one i need to keep better track of is my mileage when i drive by to see how the place is looking.. thanks for the list
Glad it was helpful!
Roofs are considered an improvement (as an a capital improvement) & therefore Subject to the depreciation table not as a wholesale whole number deduction.
Just a reminder that it makes sense to depreciate the max amount if you're holding and renting property but you'll get hit harder if you're flipping.
Why exactly? Thanks!
WoW!!! I am not real estate owner...yet but I would LOVE to become one. I aways have wanted to own rental property. It has been sooo worth the low cost to become a subscriber to your "channels" (sorry, I don't know what else to call it.) I am really looking forward to learning more Clayton. Thanks ooodles!! Happy New Year!! 🎉🎊 May the new year improve, for EVERYONE!! 💜🌷
Should mention the depreciation recapture if the property is sold...
What is the capital gains formula for selling an investment property if there is still a mortgage owed?
One thing people usually forget about write-offs is that you have to pay for them in the first place.
Thank you, finally some very helpful advice
I own commercial real estate, so I am familiar with depreciation. Repairs and improvements are different things. It may well be that the IRS is not a stickler about these, but they are distinctly different and it sucks for me to have to pay for a buildout for a new tenant and not be able to claim it right away, but have to amortize that expense over the life of the property.
It benefit you because Capital Improvements even though they are depreciated they reduce your taxable income
But A mortgage lender can add them back in to your qualifying income to help you buy more property
From talking to my friends that own rentals that your better off buying a multi unit rentals like a duplex
I currently own a single family home as a rental
+Don Dressel I personally prefer to invest in single-family homes. Here's why: goo.gl/QGc95i
Thank you Very much. I just bought a Investment property and your advise is very helpful.
Thank you for quality information!!! Go Jersey!!!
Great video. Thanks for the
Info. I am a beginner at renting properties .
I know 🤦🏽♀️🤦🏽♀️🤦🏽♀️I should be listening, but I'm mesmerized by your eyes🤷🏾♀️🤷🏾♀️🤷🏾♀️
Don't you mean "mesmer - eyes - d"?
You should see his wife's eyes! :D
@@michaelking42 😂😂😂...I truly doubt if her eyes will put me in a trance
Nadiya QT lolololll
I have a question that i look all over the internet and i cant find the answer. I hope some one here have the answer .
The depreciation is calculated from the money ypu have left after expenses like mortgage and water bill . Example
I charge rent 1k per month x 12 is 12,000 a year ypu use this amout or you use the amount left after expenses like i charge 1k per month but i pay 50 for water and 600 fpr mortgage i have left 350 per month x 12 is 4,200 per year. Which one you use yo calculate depreciation please some answer ???????
Solid info. We are considering a rental out of state!
Print off a sch e and it will list your real estate expenses. An 8829 also if you use a home office. I forget but i think an llc is a 1065 partnership return. Not sure but if you make an llc you will report your real estate there. Key though get a sch e form.
what about the property taxes ? can the taxes paid for county/ city be deducted ?
Very good information. Thank you very much.
I plan to buy another house and rent out my current home. Can I put it in an llc and write off the repairs it needs to get it ready for a rental. Repairs are minimal painting, deck repair and new roof.
"Keeping track"
Great vid thanks. I think a roof is a depreciation over 27.5 years not a repair deductible totally in the year done.
If you are doing repairs yourself can you deduct your time like paying a contractor?
What about lawn service .
Great work Clayton !!! Thank you!
What about the property taxes here in dallas you have to pay 15,000 of property !
1. How do u get properties on LLC / Corp.
2. How to make the bank do that as in most of the cases they don’t agree on this as the mortgage is taken in the name of the owner / spouse ..
3. Is depreciation on asset mentioned by u applicable in Canada ... thanks
The mileage credit is ridiculous! For example, I know people who use a service to accept rent and of course there's a fee. I have 3 local properties so I can drive, pick up the rent, and stop in the place I was undoubtedly going to drive to anyway for lunch because it's on the way. Now instead of paying a service 2% or 3% I get all of the money, an opportunity to visually inspect the property (last time on one I realized I need to clean the gutters), and the drive itself becomes a profitable trip at tax time.
All this applies to a single home 🏠 and I just buy another single home which I’m living in it any reforms or additions like a privacy fence counter tops...etc would that add value to the house and I assume since I’m living in it I won’t be able to claim it on this years taxes?
You can only save on taxes for the income from the real estate property. which means if you have a regular job, you still have to pay taxes on those income and you cannot claim rental expenses to reduce your taxable income that came from your regular job
Great, straight forward information, thank you!
What about maintenance costs, i.e. annual inspections of water softener, Iron curtain and HVAC system?
I was wondering how deductions apply to purchasing a new property. From what I understand, you can’t deduct start up costs. Is this correct? If so, if the previous tenant is in the house after you close, and move out after a few days, are you then able to write off start up costs? I’ve also read where a loophole is to list the property for rent day one, even though it’s not ready to be rented.
+tpmartins You are correct! You should check out Garrett Sutton's book, Loopholes of Real Estate: goo.gl/JaKc92
Support your videos as always!
Can you do some of it if you rent part of you home and you don't have a company created such as LLC?
I have 2 rental properties coming and this helped out a lot. thanks for the info definitely subscribed
Thanks a lot!
Okay first, I need the contact info of your accountant lol
morrisinvest.com/taxes
IM a landlord 🏡in Las Vegas
Thx for the 411.
I also live in Las Vegas and i am interested in rental investing is there any way we could meet up and talk
How about legal services for civil cases against tenants and property managers can this be written off a a tax deduction?
Loved all this information
Q: Is my apple care the same as insurance? Can I right of an electronic that has to do with my LLC?
Is this in Australia
This was great! I learned so much so quick!
replacing a roof is an improvement not an expense right?
+Marty Flipper Check out this podcast episode about repairs vs. improvements: goo.gl/yvL5ws
Marty Flipper you're right. A new roof would not be allowed to be deducted. Repair vs. Replace.
George Allred not all roofs can just be repaired though. At some point a new roof is called for. Is that an expense that can be written off?
Lindsay Maupin no. A new roof is considered an improvement and just be depreciated with the house.
Marty Flipper correct, he's misreprenting some facts
Do you have to have the property under an LLC to do this?
I recently created an LLC, for a reason other than property ownership and only lately decided that i wish to buy and rent out homes. My question is should i buy those properties under the said LLC or under my personal name. Thank you
This it true only for usa or it works for europe as well
Is this true if even if you’re a landlord without an LLC? Or do you need an LLC
No need for LLC
Thank for your videos!! I recently purchased my first property and am renting it out while traveling for work. This is my first year owning a rental, so I only have one. I am trying to figure out how to do the taxes myself and am unsure about what to put for depreciation. This is my main question right now.
Does the 27.5 years start the year you purchase? Do I put $0 in those spaces for “before and after 1997” since I just bought the property? Or do I have to calculate it using the fair market price/appraised value? So many questions. Thanks!!
Get an accountant.
Can you write off the amount of money you pay your accountant to do your taxes as a business expense?
Thanks. This was short and sweet. New subscriber here.
Glad you liked it. Happy to have you here!
Can you offset your expenses to your w2 income if you are filing on a schedule e
I wish I could deduct a new roof as an expense in the current year but it needs to be listed as an improvement and depreciated over the expected life span of the improvement.
This guy unbelievable awsome
Me living in jersey wanting to get into real estate when he said you dont wanna do it in jersey
Hey question? If u don’t have a business can u write these things off on your personal income? Newbie here
No, this is for investors.
You don't need to have a business to own Rental Property. Altho some Cities requires a Business License such as Central, S. Carolina. Some cites don't require a licenses but require you to pay a fee on the refrigerator, washer, dryer which gets depreciated until zero like Lehigh Acres, FL. Some cities don't require anything like Benton, AR or Lawndale, CA.
I am buying a second home, I have an LLC but not buying it in an LLC is that terrible. Can I convert it later?
Very clearly explained. Really helped me understand how this works. Thanks Lot.. Morris
So glad! Thanks for watching.
Amazing video thank you
I have a question obviously there is a difference in tax benefits between baying house where you gona live and baying a income property
Can you point out some or all the differences between those
And what is difference if you bay income property a duplex and you live in one appartment and rent another one
Thank you
Clarify keeping track please?
How much of the expenses listed can you write off is it a certain portion of each one or the complete exspence
Hello is good if i buy a car for my real state LLC, and if i sell other things with it like office products, then isn't a problem???
Can anyone do depreciation? I thought you have to be a “qualified real estate” professional?
Extremely valuable; I was recently wondering and seriously thinking about how taxes are handled when you have rental properties- thanks Clayton!
What's the difference between a repair and an improvement???
Linzay Kelly repair: replace broken stove, fix hot water heater, replace broken faucet etc
Improvement: add privacy fence, add backsplash in kitchen, add wooden blinds, put in fancy new faucet in kitchen
For rental property what section should I put for tree removal write off?
could you write off a shower replacement if the current shower is leaking and needs to be removed for water damage inspection? The current shower is also designed for someone with a disability and I currently rent to a small family with a child that requests I replace the faulty shower with a tub if possible.
would I be correct to assume that a new shower or tub stall would constitute a replacement and not technically a repair? Or would this situation be some what different considering the leak and potential long term damage that could occur if not dealt with. e.g. serious water damage, mold problems such things that could lead to long term health problems and maybe even the floor caving in? Water also effects the family's ability to do laundry as it leaks directly above their laundry area.
Do you suggest I get an LLC on my first property investment? I am purchasing my first property in my home town (just miles away) as my first real investment! I’m very excited and a bit scared at the same time.....
So I have 3 rental units on one property so do they all work under the same LLC or get them their own?
I'm buying my first home which is a 2 family. I plan to live on one floor. Since I'm living in the property also... Is half the bank loan interest and half the property tax I pay deductible? Or can I deduct all of it?
Learned so much!!!
But if I don’t have any “income” from the rentals, how banks going to financial me for the next mortgage???
I thought putting on a new roof is an appreciation, not repair. Are tax accountant fees a write off?
Can I as an investor of a rental property write off expenses for initial rehab of a house and the contractor’s work on the house? Your videos have been extremely inspiring and informative. Hope to get out of the rat race soon.
Yes! Contact your CPA!
Only as a capital improvement which gets prorated out over 27.5 years. This guy was wrong when he stated you can deduct a roof. The only way you get away with that is if you don't get audited!
Hello does this apply to real estate investment in Uk or just US?
So I have a 9-5 job and I'm at a high tax bracket. My personal income tax is usually around $20k. Will investing in real estate offset my personal income tax or is it just for taxes in the real estate business?
Also wondering this, did you ever find answer?
But what if the IRIS views your property as an investment not a business
How do you qualify for new properties if your income breaks even because of so many losses? Aka offsetting income . I hope I asked that correctly 😂
Very informative and helpful video
Thanks for saying so! Glad you liked it.
Gotta love those business expenses!
Very good content, I just subscribed, it’s nice to have someone that gives actual detailed info. I’m finding not many do in this business
Thanks so much, Michael! Glad to have you here.
Can you claim depreciation in your home if you are using it as primary residence ?
What do you mean write off ?
Is HELOC interest rate still tax deductible? A CPA Illinois friend of mine said no. New law I'm guessing in 2018.
We have a video on this topic! bit.ly/2m5ecNc