How to Use Real Estate to Avoid W2 Taxes

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Here's are some tax deduction tips that can help you save more on paying taxes.
In this video we will discus: How to Use Real Estate to Avoid W2 Taxes
- Real Estate Professional Status
- Depreciation
- Short-term rental real estate
- Rental property tax deductions
Watch this video to avoid overpaying to Uncle Sam and to get educated on how to leverage the tax code!
*Disclaimer: I am not a financial advisor nor am I an attorney. This information is for entertainment purposes only. It is highly recommended that you speak with a tax professional or tax attorney before performing any of the strategies mentioned in this video. Thank you.

Опубликовано:

6 авг 2024

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Комментарии : 873

@svuvmdv4608 11 месяцев назад

I am 46 and working for 22 years now. This is by far the most useful video for tax saving on RU-vid, period.

@MarkFisher88 2 года назад

I’ve done research over the past year so I already knew this but the way you explained it made it so much easier and would have saved me countless hours if I saw this first. Keep crushing it brother!

@Dm001681 Год назад

That was a fantastic video! You broke it all down in a way that was super easy to follow, thank you!

@tkpatton1185 Год назад

I am very much "getting" this and am super stoked that I stumbled on your mistakes with LLC's video with impeccable timing. Thanks for making this all available!❤

@holylabs 2 года назад

You have a gift for teaching. I’ve watched many other videos but you know how to connect everything in a way its much simpler to understand. Glad i found you. Thanks

@user-ef9si8ob2t 2 года назад

Thanks for your comment ⬆️ Reach out to me for consultation and more tips on how to build your finances ✉️,

@radumesesan987 2 года назад

such a legend. man the tax code was invented for us to utilize not fear. thank you for doing your research and delivering to us. the value you bring with every video is enormous. Thank you Karlton

@bencoughanour1832 2 года назад

This was a terrific video to bring together so many pieces! I used to send clients 5 different RU-vid videos to explain what you have in this one clip. Thank you.

@nitenitenurse713 Год назад

Just stumbled upon your video and you explained everything in such detail and simplified for even me (not a math whiz or investment whiz)! Thank you! Thank you! Thank you! I liked and will be following you to learn more! Sharing with my teens so they can have a head start and do more with their money than I ever did! GOD bless you mightily! ❤❤❤❤

@TheBusinessGuy 2 года назад

Very well done, Karlton. You take boring (but important) topic and make it fun to watch. BRAVO.

@tarast4456 Год назад

agree

@TravelsoFun 7 месяцев назад

You are the best! I love how you explain things. I just discovered your channel about a week ago and I’ve been binging on your videos. I love this one, especially. But I love them all actually. ❤❤❤❤❤❤❤❤❤

@shugahill97 2 года назад

Karlton, this video was amazing. This is exactly the kind of information I have been looking for. Everyone needs to listening to this.

@paulmorrow8372 Год назад

I spent 10 years in the consulting practice of a large accounting firm. I am not saying this video is wrong, but one BIG thing this video does not mention is that the depreciation taken lowers your basis in the asset. When you sell the asset you now have a higher gain and pay more taxes. There is something called 1250 recapture which taxes that portion of the sale at higher rates than normal capital gains. You CAN benefit from the rate arbitrage between ordinary losses and 1250 gains, but because depreciation was taken more gain will be recognized later and at a higher rate.

@samuelhartzog7209 Год назад

Agreed but that's when you need to get into 1031's, stepped up basis, Deferred Sales Trusts, Delaware Statutory Trusts, Spendthrift Trusts etc

@Matt-em1ig 5 месяцев назад

@@samuelhartzog7209 and then you might avoid taxes, but spend a mountain of money on an army of attorneys and title companies to draft and perform all of this. And 1031 doesn’t eliminate anything, just kicks the can a little farther down the road.

@simplescents3309 2 месяца назад

@@samuelhartzog7209can I hire u

@uticany1 6 месяцев назад

Exact video/training I was looking for, for a long time. I learned more in this one video than all the videos I watched in the last 6 months. Thank You

@paulmorrow8372 Год назад

The “excess business loss” rules in IRC 461(l) were amended by the CARES Act in 2020. These rules prevent you from using business losses from pass through entities (partnerships, s-corps, LLC’s, sole proprietors. Etc.) to offset W-2 income. It does not matter how active you are. If you exceed the income threshold you cannot offset W-2 income with business losses.

@zakshuman8450 Год назад

Real estate professional status does help here

@paulmorrow8372 Год назад

@@zakshuman8450 IRC 461(l)(6) says that the excess business loss rules shall be applied after the limitations of IRC 469. IRC 469 is where the passive loss rules are codified and includes the “real estate professional rules”. The excess business loss rules are generally agnostic to the income type. The only exclusion to the excess business loss rules I know of is certain farming income/losses for certain years. For a single taxpayer the most business losses you can uses in a year is $250k (plus a little for inflation). So if you have a 500k W-2 and a real estate or other business loss of 500k, you would still owe tax on 250k. This is the w-2 income minus the maximum business loss (250k for single for 500k for married filing jointly). Any excess loss is carried forward as a net operating loss which has other limitations in subsequent years.

@saintfuego1822 Год назад

@@paulmorrow8372 but this only applies to those owing over $250k on W2 taxes correct? If so everyone under that threshold should still be able to do what the guy in the video is explaining.

@chrisbrooks4885 Год назад

WELL ACTUALLY ERASING 250K OF YOUR W2 INCOME NOT 250K OF TAXES, ALL DUE TO THE BUSINESS LOSSES GAME. BUT WHAT THIS GUY IN THE COMMENTS IS SAYING REALLY HAS NO REAL RELEVANCE WITH 99% OF THE POPULATION. THIS 250K LIMIT I’VE NEVER EVEN HEARD OF IN MY 7YRS OF DOING THIS, SO I HAVE TO LOOK INTO THAT TO SEE IF ITS BOGUS OR NOT. NOW EVEN IF IT WERE TO BE TRUE THAT YOU COULD ONLY WRITE-OFF $250K OF W2 INCOME FROM BUSINESS LOSES, THAT’S NOT INCLUDING THE OTHER WRITE-OFF’S THAT’S NON BUSINESS RELATED. YOU CAN VERY WELL WRITE-OFF ANOTHER $100K IN NON-BUSINESS REALTED WRITE-OFF.’S AGAINST YOUR W2 INCOME. AND WIPE OUT $350K OF W2 INCOME. THEN YOU COULD START AGAIN WITH YET A 2ND SEPERATE BUSINESS WITH WRITE-OFF’S. AND ON AND ON AND ON…. THE THING IS YOUR ALSO NOT PAYING ANY TAXES ON THE BUSINESS INCOME IN ADDITION TO THE W2 INCOME. AND EVEN IF YOU DO WIND UP PAYING ANY TAXES ON THE W2 INCOME, THE OVERALL TAX SAVINGS WOULD BE ASTRONOMICAL IN COMPARISON TO THE NONSENSE TAX THAT YOU’D PAY.

@waqashaleem9886 Год назад

Can we schedule a 1x1 meeting ?

@tejaswinigaikwad7356 Год назад

Very informational video, can't thank u enough for sharing the info. The way you explained it made it so much easier to understand all jargon. keep it up.

@jasminejohnson4707 Год назад

This was everything. I even laughed out loud a few times when you dropped major gems. I am soo thankful for this. I feel like I'm understanding a foreign language. Great job!

@nathanmarsala3099 Год назад

You are a genius my good sir!! I thank you for all your videos!! I'm a new business owner and learning all of this the hard way till I stumbled upon your videos. I seriously love you my friend!😁

@jakobdeiner6554 2 года назад

I am only 17 and turn 18 in a few weeks. Have learned so much from you and can't wait to start using all the information you have taught me. In the future I plan on being one of your clients.

@kashfortheking Год назад

Good luck youngster. I wish you much success in life with your rentals and your businesses.

@KayakDIY Год назад

Buy a duplex, triplex, etc as your first home. House hack. Live in one side and rent out others. This will allow you to save money for another property. Rinse repeat. Wish I did it long time ago.

@Anonyme67 Год назад

@@KayakDIY bad advice. Duplex comes with a lot of headache with maintenance and tenants especially if they don’t like each others. Single homes in good neighborhoods is the best. Don’t ever invest in the hood. You can also buy distressed homes and fix them ( but if you don’t know what you are doing contractors might still money from you). I now buy ready to use and do minor works.

@Angelhunterthegoddess Год назад

Learn the tax systems and not just be a client let him teach what you’re not gonna ever have a chance to learn in school.

@KayakDIY Год назад

@@Anonyme67 wrong

@chrismonserrate 8 месяцев назад

The only video on you tube that breaks this down so plainly and decisively. Thank you!!

@camillejennings4533 Год назад

I love your channel. I learn sooo much. You break things down so well. Thank You!

@EMB-tl6mi 2 года назад

Omg! Where have you been my entire life? I just saw this video and looking forward to seeing the rest, I'm already loving you. Great, awesome content!!!

@karltondennis 2 года назад

Thank you! I look forward to seeing you on the challenge www.thetaxfreewealthchallenge.com

@ramys642 2 года назад

You explain this so well! Greatly appreciate it.

@karlabruce2871 Год назад

Straight to the point, great video!

@joejohnson4354 Год назад

There's limitations to all of this tho. Your tenants have to be less than 7 days on average (essentially must be airbnb or the like). I'd also assume that you can only depreciate an item in your home once. Meaning if you depreciate over a short number of years, after those years have passed, you can no longer claim a loss every year. How many airbnb rental properties truly have 200k per year of itemized depreciation as in the example? This video is a good concept but only applies to a small subset of people and most likely does not generate as large of a tax write off as the example implies

@albundy3929 2 месяца назад

This guy is full of bad advice.

@eddiemartinez9492 2 месяца назад

It's not bad advice but the original comment is correct.. this will work in year 1. Once you've done the cost seg you need a new property to do it again. Also, the STR is work. And much riskier than owning a straight up rental which would be considered passive.

@doordiariesre Год назад

I loved the way you presented this information - the graphics and visuals really helped me understand the topic better.

@MK-tf8zb Год назад

New to real estate investing and I can't get enough of this guy. Keeps it simple and explains things well. Awesome service you are doing!

@asliteb7942 Год назад

Thank you, KD for another amazing and easy to understand video. I am learning SO much as I prepare to become a business woman. TY

@AliceKovska Год назад

omg thank you so much for this information. i saved it and will be watching again probably when i get lost. i bought your moms course as well and it really breaks the tax code down.

@shannawang Год назад

Same here. Already knew about this for the past 10 months. Your video made it very clear and easy to understand. Great video. I must take action.

@davidjdoherty 8 месяцев назад

Really great explanation. I had read bits here and there but this is a really great primer to give people the base understanding of these concepts

@danieldantonio1892 2 года назад

Very good video. Will watch multiple times. Would love to be able to talk more about this topic.

@metakmoto 2 года назад

I love how hyped Karlton gets about his own knowledge 👏 awesome!

@mikelong3444 Год назад

Great content. I am not able to use this YET. However, once I build my infrastructure I will definitely be looking into this strategy. Thanks for sharing your studies.

@justinmcneil6195 Год назад

I've been thinking about this and now you just broke it down in such a easy way that I want to learn more about it

@YourPOP 2 года назад

This is phenomenal!

@nsharma99 2 года назад

Dude, thank you so much! You’ve got a supporter for life!

@cyrenthiaclark7382 Год назад

I watched til the end. This is gold. I read this, but I love you explanation!

@carolinatardelli4932 Год назад

Karlton, you are just amazing and this is the most valuable video I have seen on RU-vid! Thank you!

@juliancanizales5817 2 года назад

You are literally blow mine mind right now Karlton. I have been thinking about opening a business, now I have a clearer view on what to do thanks to you...

@lkylky1730 Год назад

This guy is just too smart. One of the sharpest people that I have ever come across. Keep it up man! I have subscribed already. I will share the news to others. 🙏🏽👍🏼✊🏽

@awesomebosssoccer7387 Год назад

Hi Karlton. Thanks for sharing this information. I am thinking about investing in a 37 unit JV out of state. All 6 partners have a percentage of ownership, voting rights, sign on the loan and an active role. My role would be to prepare and update the financials. Would the hours spent in this role count towards material participation? Thank you!

@alexoliman3198 Год назад

Wow. You put it all together so beautifully! You are great!

@giovannialvarez807 2 года назад

Great information right here! Brandon hall real estate CPA has some great info on this too. Thank you karlton!!! Keep it coming!!!

@jjvdz Год назад

Thank you for your content man. Such Valuable Information

@ugandarichardsonlcsw-ki3ct Год назад

This was really good. Thank you

@lasoundwaves Год назад

Great info! Thanks for taking the time.

@TT-vs2ti Год назад

Wow thank you so much for this mind blowing content! Need this badly. You got a yourself a new subscriber.

@LilahJ83 2 года назад

I love this channel. I’ve learned so much! Thank you.

@joanhngo-htxrealtor7451 2 года назад

Wow!!! You are such an inspirational guy!!! Love hearing you speak the truth and nothing but the TRUTH!!! Keep it going KD!!! :)

@MK-tf8zb Год назад

I am trying to do this now, it is amazing how many CPA's do not know about this and are fixated on your method without the loophole or know nothing about it. I am actually teaching CPA's when I talk to them and I am nothing close to a CPA or tax professional. I just watched KD. Wish your firm KD was more affordable for those just starting off though. Would love to use this guys firm but they want at least $10k.

@TRXvaulterGIRL Год назад

Oh snaps! 🥳🤯 Loving your videos. Thank you for the knowledge.❣️

@envirogreentissueculture314 Год назад

Awesome video. Very informative. Thanks for showing us the power of leveraging.

@dave1ahc Год назад

What a great primer on this subject and really helps me a lot as a real estate professional and somebody that has an Airbnb. It seems that I qualify two different ways to move this passive losses over to my active income. Thank you so much for your detailed analysis of this and helping me to be more crystal clear on it. I always wondered how that was done!

@tax-modern 11 месяцев назад

Keep in mind that whether you're a real estate professional or it's a short term rental, to qualify for the passive loss rules tax benefits you still have to materially participate. That means if you just have a property manager managing it, you probably won't qualify. Just a heads up on that.

@jiyounbae4667 Год назад

Great content Karlton! Thank you so much!

@jacktsai7165 2 года назад

love it thanks for sharing!

@_Renee2 Год назад

Love the energy and knowledge!

@sagarsriva Год назад

Amazing video! Love your passion about teaching this

@tlshachar 2 года назад

One of the most important videos I watched about how to leverage RE tax benefits... Thank you so much for putting this together. Super helpful!

@karltondennis 2 года назад

Glad you enjoyed it!

@wilport Год назад

By far the best explanation about this topic. Thank you Karlton

@ibeballintv8228 Год назад

great stuff. much appreciate ya!

@christopherperson5097 Год назад

Hey Karlton, I’m patting myself on the back with a smile. 😁 thank you! 💪🏽

@Ironmon007 Год назад

Karlton, great content! Keep them coming Sir...

@Investorjimmorgan Год назад

Your awesome! Thanks for the valuable info. 🤑 Have a blessed day 🙏

@googleuser6040 2 года назад

Love learning with you

@monicatemperly6247 Год назад

Thank you for the information. I appreciate it!

@hans5821 8 месяцев назад

Feeling so lucky to have found your Channel. Thank you

@johnramirez9160 6 месяцев назад

Please go into more detail on the 200k in losses. That doesn't seem possible yearly

@vicwaikchan2614 5 месяцев назад

i have the same thought, how does the 200k coming from ?

@flaviohernandez9720 Год назад

Awesome!! Thanks, will get in touch with you in time !!!

@rplaisime 23 дня назад

Thank you. Can’t wait to have some one time with your team.

@yaseenms 2 года назад

Wow 🤩. You are something. You are very honest and nailed everything in simple terms.

@nateg5915 2 года назад

Thank you Karlton for keeping dropping gems like these. I'm glad I found your channel and I subscribed immediately. Now a short term rental is pretty much a Air B&B you can rent out only 7 consecutive days or less at a time? Is that correct? I currently don't have a rental property but im looking into to it. Im a W2 worker and My federal tax liability for this year was $22k and another $8k for state. I would be so happy if I didn't have to pay any of that lol

@BiggCope Год назад

He said an “average“ of 7 days or less. So if you don’t meet the first two qualification rules to be a REP, then you can ‘materially participate’ in owning a STR as that mode of operating an investment property does not fall under passive income. It’s active income.

@mariyaasghar7539 2 месяца назад

Excellent explanation! Being a physician with minimal Tax knowledge, this was very easy to understand !

@nikkidiaz2619 Год назад

Mind blowing content! Thanks Karlton for such valuable insight.

@humblebee7979 Год назад

What a smarty. 🤓 Great information - thanks for sharing your knowledge!

@naikeelovince7774 2 года назад

Karlton, you always give 💯 of you with each video, however, you are brilliant in this one AND it is exactly the info I need this year. You are so smart and handsome, a winning combination :). Thank you for this great information.

@Leonardj3rd Год назад

Okay Karlton, you got my interest. Well explained Brother. I’m subscribed!!

@swagymom 2 года назад

Great content Karlton knowledge sure is power…….

@NJ-rl3jr Год назад

Literally Just changed the trajectory of my entire year! God Bless your ministry. Thank you brotha👏🏾

@consciousself5375 Год назад

You are God sent. Thank you for allowing Gos to use you for those of us who need your expertise🙌🏽🙌🏽

@nicholasb9083 2 года назад

Glad I have found Carlton and the time to absorb his knowledge. Carlton, you just gave me chills with this one. You just saved me so much stress, time and money!! Thank you! I will most definitely be an avid subscriber!

@CStig89 2 года назад

GOAT ... that's all. I've been learning taxes for a little while but this my friend?! Finding your channel I've struck GOLD! GOLD YOU HEAR ME??

@davidm5298 Год назад

Thanks for the info!

@cromeromail 9 месяцев назад

This was very informative Karlton. You earned a subscriber!

@HighlightHeroesTV Год назад

Thank you so much!!!

@dejozollc3549 2 года назад

😱🤯 Karlton you blew my mind. Thank you so much.

@BetterWealth 2 года назад

Great video brother!

@MZK485 10 месяцев назад

Love it dude, looking forward to our call next week.

@sabinsadeh113 Год назад

Hey Karlton thx for the killer content. Does this short term rental strategy still apply if the property is 50/50 with a business partner on the title?

@Thenumberone341 Год назад

I have been watching tons of videos and this one is the MOST AMAZING ONE!! I was finally able to understand how this really works. THANK YOU!!! I do have a question: I have had hard time finding a professional real estate CPA to help us with our taxes, the few recommended by people I know that are in the business are not taking new clients. What is the best way to find one? Does your firm offers this service? :) Thanks!

@simonasogwa7988 Год назад

Great information am not there yet but I want to learn as much as I can do to prepare myself for when I eventually get there

@marionharris5952 Год назад

great video man. thanks.

@ArtfullHealing 9 месяцев назад

You did great explaining. Amazing. Thanks a ton.

@azhardav Год назад

What was not discussed or mentioned is if an individual has say 4 rental (long term) properties and 1 airbnb (short term) does that 1 short term now include the long term passive income offsets against non-passive income? That wasn't mentioned.