A very important “con” regarding real estate professional status and actively participation. Understand when you elect this option you are telling the IRS that you no longer what this taxed as passive income. You want it taxed as active income. Well, active income is subject to Self employment taxes. Now we talk about having cash flow right? Pay the expenses. Pay down debt, but if on paper you have a profit, you will have to pay self employment taxes.
Thank you for all your videos very informative 🙏 if a rental become my primary residence and I live there for 3 years and decide to sell. Do I have to pay recapture depreciation and capital gains?Ty
Karlton this content truly made my heart smile and excited me !! I have always wanted to know how the game is played lol. Do you work with clients out of state I live in Chicago?
If I start with straight line depreciation for a few years, can I then perform a cost seg later on and accelerate depreciation in say year 4 or 5 of owning the property? If so, would I have to subtract the total amount I already depreciated?
Remembering that I'm and you guys are taking a different route its not the cookie cutter traditional route which is awesome . Just great to surround yourself with similar mindsets lol because if you start chatting this with an ole friemd or family 😅oh boy i dont recommend it just stick to your grind and show em with action after a decade of asset stacking only screw them liabilities God bless
Instead of the living trust, what do you think of the lady bird deeds to pass on your real estate properties to your heirs when you die with the same step up in basis benefits?
This series strings together several tactics KD goes over on his channel for a holistic strategy. Stick with this channel and marinate on all the information
is there a limit to how much w-2 income you can offset ? YES there is! Karlton never mentions it! Can you hire a management company and not jeopardize the 100 hr material participation test? NO - Karlton does not mention this! Can you do a 1031 and defer the property that was claimed as bonus depreciation property? NO - Karlton does not tell his viewers this either!
@@THEtaxstrategists hello stranger all the points you've brought up exist in my notes from Karlton's lessons. The topics are complicated. I would also find it hard to condense this information in a TH-cam video. Good luck to you
Good video, but as per my understanding is that you can do a cost seg study on long term investment rental property and take the advantage of bonus depreciation only if you have a real estate professional status
I have a W2 and some long term rental properties. I don't want to get into Air B&B or anything like that in terms of short term rentals. What are my options to save on my W2 taxes? All my rentals are in an LLC S-Corp
Carlton, Is there an app you recommend or a way to effectively record material participation for section 469? Our CPA said it needs to be recorded as it occurs in the event of an audit. Appreciate any insight. Love the channel.
so then the obvious next question is, when is the optimum time, as an investor, to sell the property you have been taking accelerated depreciation on, and roll it over into a new property?
Could you take accelerated depreciation on a Short Term rental in year 1....then switch that property to a long term rental in year 2 and not have any tax issues? Or does this property have to stay a STR for its duration?
What if you put your children on the property title. Like a quickclaim. So they are one of the owners. Than would they have to pay any taxes or anything. Since they already own the property!?!
Someone please educate me. Does all of this basically mean that you have to have Airbnb’s or vacation rentals. It seems like none of it applies to residential rentals.
Okay. So I’ve clearly missed something. If I am a w2 employee.. and own one home that I rent out. It will be passive income.. I really stand to gain nothing. There’s no tax advantage to doing this. Someone correct me if I’m wrong. I cannot use it to offset my w2.. creating a paper loss will be extremely difficult with standard depreciation
Same question I had. Most of my W2 colleagues have long term rentals. While the accelerated depretiation does not offset the W2 income it DOES offset the income from the rental property so you aren't being taxed for both your W2 AND your rental income. Even though it didn't come out of his W2 taxes, my colleague said he got 20K back because he invested a ton of money in his long term rental property last year (between rentals). If you don't want to own a short term rental there is really no way to offset your W2 income. You're offsetting the taxes you would pay for your rental income. At least that's how I understand it.....
Shame 1031 exchange only works on property to property. Not Investmet to investment. Like if you want to sell your land property and buy Stock property. Or say invest in a and open up a business.
Could you maybe make a video on how do our taxes ourselves? E.g. LTR goes on what form, MTR goes on what form, STR goes on what form? A lot of accountants do not even know about cost segregation. Cost segregation goes on what form, etc Would be super useful thanks!
@@rondabolton13 The property that the cost seg study identified and was written off is now what is called 1245 property. It is NOT eligible for 1031 exchange since it is no longer "real property". It actually can invalidate the 1031 exchange in total if it is greater than a certain % of the exchange. Furthermore, Code Section 461(l) - excess business losses, limits the STR rental loss that can offset W-2 or 1099 income. Lastly, he makes it sound like meeting the material participation requirements of 469 for STR is easy - it is not and there are numerous cases where IRS disallowed the taxpayers' claims of material participation
thank you Karlton greak info for us I am trying to invest long term rental real estate how can we work together do you have web side or contack number thank you Bobby Burhan MIAMI FLORIDA
If you're a short-term investor you would not want to immediately turn around and sell what you just depreciated or depreciate something you're about to sell i guess lol
![How to Use Rental Losses to OFFSET W2 Taxes! [Part 1]](http://i.ytimg.com/vi/1a38vrvO-ko/mqdefault.jpg)
My three favorite channels: Karlton Dennis, Stock Brotha, & Richard Fain. Make my week complete!
These two videos are all you need for real estate investing. This is treasure.
This is a masterclass in real estate taxes
I love how you expain not only the pros but also the challenges and cons of investment
Yeah, me too.
Karlton, you do an excellent job of explaining these tax strategies.
Very well done Thank you
Thank you, I have been trying to understand this stuff for yrs. You nailed it. Very clear explanation. Thx you.
Great series. Keep this up and would love to see case studies or examples with pretend numbers
A very important “con” regarding real estate professional status and actively participation.
Understand when you elect this option you are telling the IRS that you no longer what this taxed as passive income. You want it taxed as active income. Well, active income is subject to Self employment taxes.
Now we talk about having cash flow right? Pay the expenses. Pay down debt, but if on paper you have a profit, you will have to pay self employment taxes.
Excellent video. So glad to have found this channel.
Thanks!
Mr K you are so informative and knowledgeable …. Thank you for this video… I bless you integrity for more success!!! How about trust???
Karlton is straight up knowledge base!! Incredible content! Thanks for your great content Sir!!! Best, Mark Rickert
I've been watching KD since he had less than 100k subs. Over half a million now. WOW, well deserved brudda! Cant wait to work with you in the future.
Abundant blessings upon you and your business. I love the real estate game for building generational wealth
Thank you for all your videos very informative 🙏 if a rental become my primary residence and I live there for 3 years and decide to sell. Do I have to pay recapture depreciation and capital gains?Ty
Great video. More clear how to invest in real state. Thanks 🙏
Karlton this content truly made my heart smile and excited me !! I have always wanted to know how the game is played lol. Do you work with clients out of state I live in Chicago?
If I start with straight line depreciation for a few years, can I then perform a cost seg later on and accelerate depreciation in say year 4 or 5 of owning the property? If so, would I have to subtract the total amount I already depreciated?
BTW…Awesome videos…need a Tax Strategist, which I just learned existed, instead of a CPA…will continue to watch and learn…thanks!
This video should have 10,000,000 views in 1 day🎈
Straight to key points and very concise/clear!!!👍👍👍 thank you! You are very smart man at your age 👍
Remembering that I'm and you guys are taking a different route its not the cookie cutter traditional route which is awesome . Just great to surround yourself with similar mindsets lol because if you start chatting this with an ole friemd or family 😅oh boy i dont recommend it just stick to your grind and show em with action after a decade of asset stacking only screw them liabilities God bless
good job
wow! i didn't realize a 1031 allows you to carry over the depreciation! I love how you break it all down!
Wow he explained it all!!
Thank you!
Great information!
Step up in basis rules have changed recently tho, correct?
Great presentation and awesome stuff.
You are awesome brother
Thank you. I appreciate you
I swear I already watched this like 2 days ago .. did you have to reupload?
Cost segregation + 1031 exchange! Love it.
New subscriber! Awesome content, forwarding to my family investors. Considering your services …
I learned that step up in basis is going away? Any advice?
Instead of the living trust, what do you think of the lady bird deeds to pass on your real estate properties to your heirs when you die with the same step up in basis benefits?
Well put! Wish they taught this in school
Do you buy a short-term rental House cash or do you take a mortgage
This series strings together several tactics KD goes over on his channel for a holistic strategy. Stick with this channel and marinate on all the information
is there a limit to how much w-2 income you can offset ? YES there is! Karlton never mentions it! Can you hire a management company and not jeopardize the 100 hr material participation test? NO - Karlton does not mention this! Can you do a 1031 and defer the property that was claimed as bonus depreciation property? NO - Karlton does not tell his viewers this either!
@@THEtaxstrategists hello stranger all the points you've brought up exist in my notes from Karlton's lessons. The topics are complicated. I would also find it hard to condense this information in a TH-cam video. Good luck to you
Great Video!! Thank you!
Good video, but as per my understanding is that you can do a cost seg study on long term investment rental property and take the advantage of bonus depreciation only if you have a real estate professional status
does looking for a property count towards the 750 hours needed to offset taxes on your w2/1099??
You are incredible!
I have a W2 and some long term rental properties. I don't want to get into Air B&B or anything like that in terms of short term rentals. What are my options to save on my W2 taxes? All my rentals are in an LLC S-Corp
This is more great information. Love it ❤
Do you take that through Schedule C or E?
Carlton,
Is there an app you recommend or a way to effectively record material participation for section 469? Our CPA said it needs to be recorded as it occurs in the event of an audit. Appreciate any insight. Love the channel.
Karlton. Auto correct.
Enjoyed your show. Started an abnb business this year. Have questions... may we call you? Need help with the tax forms to file. Thanks!
Will it be worth it for someone use accelerated depreciation if they make less than 100k AGI?
So how do I actually find a STR and profitably rent it out?
💎 dropped thanks my brother
Do you guys help doing taxes?
Why doe it matter if the properties are in a revokable trust to get a step up basis?
Time Value of Money = Infinity Limitless from JJK. Mind blown
so then the obvious next question is, when is the optimum time, as an investor, to sell the property you have been taking accelerated depreciation on, and roll it over into a new property?
Can you do a 1031 and buy 2 properties.
Yes, i did it.
hi from Costa Rica
Could you take accelerated depreciation on a Short Term rental in year 1....then switch that property to a long term rental in year 2 and not have any tax issues? Or does this property have to stay a STR for its duration?
So when taking out the depreciation value on a 5 year then selling in 5 years is reasonable? Not not subjcet to penalties?
Will you sell the recording of your seminar challenge, I freakin missed it
Can you get all the benefit of tax deduction with leases property and use it for Short term rental
How do I consult with you?
Karlton how do i get intouch with you?
What if you put your children on the property title. Like a quickclaim. So they are one of the owners. Than would they have to pay any taxes or anything. Since they already own the property!?!
My understanding is if u inherit a home even outside of a trust you still get the benefit of the step up in basis. Is this not correct?
Someone please educate me. Does all of this basically mean that you have to have Airbnb’s or vacation rentals. It seems like none of it applies to residential rentals.
Am I able to hire someone at your firm, (I'm in VA), or can you recommend a real estate accountant here in Central Virginia?
This man has some amazing teeth. They shine like the sun. 🌞
The sensei
Why do you love us so much? This is amazing.
What if I wanna cash out myself and not pass to the children? Is there a way to sell properties that you have depreciated without paying the tax?
I read somewhere that you have to live in it as your primary residence for at least 2 yrs then sell it.
Can I maximize these loop holes by renting out my basement?
First investment and tax videos that are interesting and make me laugh, wonderful job 😂🎉
Okay. So I’ve clearly missed something.
If I am a w2 employee.. and own one home that I rent out. It will be passive income.. I really stand to gain nothing. There’s no tax advantage to doing this. Someone correct me if I’m wrong. I cannot use it to offset my w2.. creating a paper loss will be extremely difficult with standard depreciation
Same question I had. Most of my W2 colleagues have long term rentals. While the accelerated depretiation does not offset the W2 income it DOES offset the income from the rental property so you aren't being taxed for both your W2 AND your rental income. Even though it didn't come out of his W2 taxes, my colleague said he got 20K back because he invested a ton of money in his long term rental property last year (between rentals).
If you don't want to own a short term rental there is really no way to offset your W2 income. You're offsetting the taxes you would pay for your rental income. At least that's how I understand it.....
I remember when he had 50 followers. He keeps dropping gems.
Finding tenants for short term rentals
So if I make 300k a year w2 income... I need a cost seg that will be 300k to offset my taxes lol.
300k x 33% = 99k.
Of course the Challenge occurs when I’m on vacation…when is the next one after the Mar18-22 2024?
Shame 1031 exchange only works on property to property. Not Investmet to investment. Like if you want to sell your land property and buy Stock property. Or say invest in a and open up a business.
hello! i love your videos. are you at all open to partnerships?
TELL THE TRUTH THE WHOLE TRUTH SO HELP US ALL NOW IN THE MIGHTY NAME OF JESUS!!!
Could you maybe make a video on how do our taxes ourselves? E.g. LTR goes on what form, MTR goes on what form, STR goes on what form? A lot of accountants do not even know about cost segregation. Cost segregation goes on what form, etc Would be super useful thanks!
Well he took down my comments! Karlton must not like the fact that real tax professionals tell his viewers his advice is incomplete! BEWARE folks
What part is incomplete
He is a real tax pro tho
@@rondabolton13 The property that the cost seg study identified and was written off is now what is called 1245 property. It is NOT eligible for 1031 exchange since it is no longer "real property". It actually can invalidate the 1031 exchange in total if it is greater than a certain % of the exchange. Furthermore, Code Section 461(l) - excess business losses, limits the STR rental loss that can offset W-2 or 1099 income. Lastly, he makes it sound like meeting the material participation requirements of 469 for STR is easy - it is not and there are numerous cases where IRS disallowed the taxpayers' claims of material participation
thank you Karlton greak info for us I am trying to invest long term rental real estate how can we work together do you have web side or contack number thank you Bobby Burhan MIAMI FLORIDA
If you're a short-term investor you would not want to immediately turn around and sell what you just depreciated or depreciate something you're about to sell i guess lol
🙏🏽🙏🏽💪🏽☝🏽🫰🏼👏🏽💯👊🏽