This Real Estate Tax Loophole Is AMAZING!  

Back in the day, when I purchased my first home to live-in; that was Miami in the early 1990s, first mortgages with rates of 8 to 9% and 9% to 10% were typical. People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Pretty sure I'm not alone in my chain of thoughts.

Just did the math. If you spend 3 hr/day 5 days a week on real estate related business and log it you make over 750 in a year. I feel like that is easily done if you add the time spent scouting new properties online and in person, plus the time spent dealing with either your properties or property managers, plus the time spent calculating monthly expenses and organizing your funds for future and current properties. Drive time and time talking to clients/employees/hired labor is already an easy make on those hours.

And this is why they hired 81,000 IRS agents. For the Loopholes.

You think I won’t fill out a log book everyday

And this is why people can't afford a home. Everyone buying homes to rent them as Airbnbs.

Cool brother. My family met w him to get our taxes squared away. Super professional and he got us on the right foot. Big ups, Mr. Dennis!

I have no clue what they're talking about and because of this I'll remain broke.

I owned a Condo... Always took losses... took more time trying to fix, paint, repair, find tenants, got ripped off from non payments. Had a person once try to pay me 50 bucks a week. I told him, Seriously... I cant even cover the hassle to drive here and pick up the checks. No Venmo at the time .. Pure Nightmare. Too broke to get lawyers and it was a nightmare. ... Only way you make off real-estate rentals if u ou know how to FiX stuff yourself. A guy charged me 475 bucks to change out a thermostat. Real Estate Rental Takes skills... Don't let people think it's that easy. One of the happiest days of my life is when I sold the Condo. Never again. ... I will I ever be a Landlord. ..

What he’s explains is Passive income. Usually if spent more than you made your passive income cannot carry to your normal income as a deduction. With Airb&b you have to spend more time managing it. So you can carry those loses to your normal income. Usually rental income is seen as passive. so any loses can’t lower your normal income.

I've learned so much from Karlton's videos. It has completely changed my game plans.

BUT....if your AirBNB's rentals are, on average, 7 days or less, yes, you do get to write off passive losses but the income you earn will be taxed as earned income not passive income so the benefit is not as great as described.

2008 to 2012: how do I do taxes 2013 to 16: here's a loop hole 2019 to 22: how do I do taxes 2022 to maybe 2025: here's a loophole I feel like this is, ironically, a cycle without a loophole.

Soo glad there are ppl like you taking functional homes off the market to make them hotels... I wonder why there's a housing crisis, probably completely unrelated.

You have to prove you participate more than anyone else on your short term property. You can't have a property manager. For most W2 investors can't manage a str without a property manager.

A passive activity loss for a rental property is when the operating expenses for the property exceed the rental income. If an investor owns more than one rental property, the calculations are made on all properties combined. Rental income and losses are reported on IRS Schedule E form. Expectations for Deducting Passive Losses In most cases, taxpayers cannot deduct passive losses on income taxes against non-passive earnings. There are two cases where the passive losses can be deducted, including: If the modified adjusted gross income of the owner is under $100,000, they might be able to deduct up to $25,000 of rental losses if they are actively involved in managing the rental and have a minimum of a 10% ownership interest. Qualified real estate professionals can write off passive activity losses if they materially take part in the rental operations, work at least 750 hours annually in real estate, and over 50% of their work is on their real estate business. Other than these two instances, passive losses likely won’t be able to be deducted from non-passive income.

He’s correct as long as you can documentented proof of the expenses

I'm not a tax expert by any means, but from what I understand almost every loophole or tax break is done by doing one of two things: altering forms of income and deductions. The first is how CEOs get out of paying income tax. Mark Zuckerberg's salary is $1 per year. Most of his benefits come in the form of stocks, food paid for by Facebook, travel accomodations paid for by Facebook, and so on, which aren't classified as income. We have to find a way to classify income that includes these forms that don't directly put cash into a bank account. The second is how rich people who do owe taxes get out of paying them. Say a rich person owes $1 million in taxes at the end of the year. There are thousands of different deductions which can bring that down to zero. There are deductions for having children, paying for school, giving to charity, and as stated in the video, lots of losses can be deducted. Some of these help out lower income people, like dependents and paying for school, but some only benefit the ultra rich. One common scheme is to buy a piece of art for relatively cheap, say $100k. Then, an art appraiser, who is in on the scheme, states the art to be worth $15 million. Now, nobody would buy it for that, but when they donate it to a museum, it's considered a charitable act and they get a deduction based on the appraised value. Suddenly a $100k cost has turned into millions saved in taxes. Obviously nobody living paycheck to paycheck is taking advantage of this deduction. We have to find these deductions that are used disproportionately by the ultra rich and either restructure them or erase them completely. Getting rid of deductions altogether stops the ultra rich from abusing them but also takes away those helpful breaks for low income people and small businesses. A landscaping company writing off a heavy duty truck used to haul tools and scrap helps both the small business and the local economy. Amazon paying $0 in taxes because all of their profits were rerouted into research and development is not the same thing.

This is why we need a flat tax. 15% tax on all income. No nonprofits, no exemptions, no credits, no returns, just pay your 15% and that's it.

This is why we need to change our tax laws to tax ALL consumption and ONLY consumption and not income or capital gains. By eliminating these taxes, you automatically eliminate the loopholes and by taxing consumption (preferably with a VAT), you make it a lot easier to collect taxes without needing so much bureaucracy.

I love the knowledge this man Be putting out!

My dad rented a house for years & didn't do this? But I guess this is for tax evasion & considering he had his own construction business, this wasn't worth it.

And now there's a SFH housing shortage. Making people renters, instead of owners.

And this is why the pricing of single family homes is skyrocketing in the US. All so these rich people can get a little tax break.

he's a tax genius we all need to pay homage to this man he can help us all

Can someone post the “LAW"? Example would be SB9.

Business owners: pay city taxes, county taxes, state taxes, federal taxes, employee matching federal taxes, taxes on equipment, taxes on license and fees to keep the license valid every year. Employees pay federal taxes. Rich people need to pay more taxes! We should all pay 15%. As a business owner I agree!! That would save me thousands a year!

“Profession” Lol.

In case you were wondering why you're having a hard time finding an affordable home - neighborhood AirBnB rentals.

I checked out as soon as he said “something you can download offline.”

As a 40+ hour working American thats less than 18 weeks a year 62 hours a month 15 hours a week 2 hours a day. Lol HORRIBLE SO HORRIBLE!!!

Well informed guy! Thanks for sharing!

And in that moment create a housing crisis for everyone else who doesn’t spend their time avoiding taxes.😢

The government forgot who they work for

My LLC holds a 2 hour meeting where we discuss new name ideas for the LLC and document: "Meeting begins 5pm...I attended... Meeting ended 7pm"

Then the city decides to regulate short term rentals....

This is why we can’t afford rent anymore.

"you can run a SHORT TERM RENTAL BUSINESS" *lip smack

Very smart guy! A whole new level of knowledge to gain here. Thank you!

I’m a commercial lender that weekly turns down business loan applicants because they won’t qualify as guarantors because they have maximized tax write offs to save let’s say $8,000 in taxes, but now they don’t show enough income to borrow the $500,000 they need for their businesses. Be careful stepping over dollars to save pennies.

Nice. Will take advantage of this loophole when Im a daytrading millionaire

Those Airbnb rentals are asking for headaches. You’ll spend far less time filling out the log book than dealing with the problems that come with temporary renters. You have to find them a bunch of times that year even if a app is doing it for you plus the fixing the damages every other renter causes. Do it the right way or you’ll leave yourself open for the government to take it all from you.

“Half of your time in real estate, more than any other thing” == “ 60% of the time, it works every time”

Amazing, now I know! Thank you✌️.

I need more details

Basically: “I make enough money to pay my taxes, but I’m going to buy a house just to use to pay fewer taxes while shortening the supply of homes and making them more expensive for normal people who are trying to find a place to live.”

The average employee works 1920 hours yearly. So 750 hours should be very easily met. That is if you're doing your due diligence and attending to your duties as a Landlord

I'm a tax strategist. He's right. 7 days, 2 unique stays. Full deductibility on short term rentals.

Oh so that is why buying a house is getting impossible.

I love seeing black men that know how to play the game. I learn a lot from them. The credit card gurus online, the real estate gurus online, and the online sellers. Thank you guys so much. My finances are getting better with each month. Not by a whole bunch but enough to keep me positive.

Like back in the day when TV commercials show people freeze when E.F. Hutton spoke, I listen to recommend people learn from expert Mr. Karlton Dennis

#yes I do #learn a lot #thanks you

Here’s a loophole we’re all gonna buy a bunch of houses, put ‘em all up on Airbnb, making it much harder for people to find houses, resulting in the majority of people having to rent now

Time is money, money is power and experience becomes education. Or you can pay for an education to pursue the actual experience. There are multiple ways to travel to any set destination, some will be faster, others will be slower, some will be safer and other more risky. That’s why everyone lives and leads a different life, we all have thoughts to think, feelings to feel and decisions to make and all of these variables impact our life in one form or fashion, sometimes several forms and several fashions. Discipline, focus and determination are important and it’s not just what you know like everyone claims, it’s the combination of what you know and who you know. Many claim “ Money Doesn’t Buy Happiness “ You know what it does buy? time, peace of mind and with time and peace of mind, comes freedom and comfort to enjoy doing what you really wish and choose to do, at your leisure.

Dude! Your dropping so much game. I really thank you for this. 🤙🏽

Just like how the law requires you to pay taxes so you do loopholes. Pay your dues

Poor landlords, hope they close the loophole very soon 🤞

Yeah this is why people are buying up all the affordable housing and turning it into airbnbs. Making it so that poor people don't have literally anywhere to go. Thanks for sharing this advice. That was sarcasm

buy a house. and rent it out on airbnb for the week or 2 you take on holidays.

Thats on a schedule C, so after 3 consecutive years of losses , its hobbly loss and not deductible.

Thats only an Avg of 15 hrs per week in a year. That should be very easy to pull off as a side hustle

What he fails to tell you is that positive net income is subject to self-employment tax at 15.3% on top of your ordinary incomes (w-2) tax rates.

Mans said day trading is a profession. Right there I lost all respect

Very informative, here is my current scenario. I am a w-2 employee and closing in a mixed property building, two commercial offices, two apartments and a studio. To qualify for bonus depreciation I am planning on placing the studio as a short term rental via Airbnb. The property’s value building only is about $350k. How much bonus depreciation could I use if I am closing in January, 2024? Could I depreciate the whole building value at the rate allowed by the irs for 2024 (60%) year one. Or Can only depreciate the value of the studio in this case? Thanks

Can I leverage this based of the STR from my primary residence? I have an independent structure on my property (primary residence) that I use for Airbnb

Once you complete the log book, who do you report to to get qualified as a Real Estate Professional 🤔

So do the rental losses get counted towards W2 gains?

Thank you for sharing my dear ❤🙏

Bro. You got me listening lol!!!!!!

Nope nope nope! This stuff is why im SO thankful to be a housewife! I make things grow. Babies, pets, gardens, livestock, orchard, vineyard. All that money stuff can be for the men to figure out.

It’s by design that tax laws are basically a foreign language to most.

If turbotax lets me put it in it must be legal.

First sound financial advice I've seen on youtube shorts

Isn't that 2 hours a day? I'm literally just thinking out loud

Can you find the IRS resource that says this. Passive activity loss is only offset by passive activity gain exception: passive activity deduction for houses. Rental activities, even if you do materially participate in them, unless you’re a real estate professional.

If you can tolerate the headaches that can come along with real estate management then this is a great way to reduce your taxes.

How free do you feel right now?

I studied Airbnb more than just about anyone else in the country. I guarantee you that there are local regulations in almost every municipality. You have to be really careful about actually being able to operate your Airbnb legally. Most of the country has restrictions about having more than one or how much of the year that you can operate it.

The problem it’s not a loophole…… it’s just short term rental vs long term rental. Short term rental could be more profitable but also more vacancy and risk. You gotta spend more time managing it too

How many weeks a year does it have to be rented? For the full year? What if its a seasonal property like a beach house?

Am I the only one who sees how absurd, criminal and destructive this is.... no I don't mean the loop hole itself. I mean the need to try and learn how to "legally" keep the government from robbing you?!

It is not loop hole, but playing by the book :))

#1 always beware of people saying losing is a strategy.... not saying you're not building equity but just be cautious

This is an example of a govt becoming tyrannical

Constantly advantaging people who own property is how you create a wealth gap.

"7 days or less" So I can airbnb my shed for 10 minutes a week?

And this is why the loopholes always disappears by the time I get to use them. It's because social media keeps exposing them and law makers keep changing them. Just keep it to yourself and if people are tired of getting screwed over then they need to do their own research. Not have it handed to you.

Miutherfucking fire 🔥

thanks for the advice

Watch as this guy singlehandedly will get an IRS agent to show up to your home or business.

Love loopholes

My god just pay your taxes people. It’s no wonder we can’t have anything nice, nobody pays taxes!

So does this cost segregation study also apply to a W2 employee who is house-hacking a two, three or four unit multi-family home where he or she is renting the other units? Or does this only apply to W2 employees who only use properties as RB&B.

His language is crisp and clear.. and that is why he makes money No ebonics bs

*Investing in crypto now should be in every wise individuals list, in some months time you'll be ecstatic with the decision you made today.*

Conclusion: they lie for money. Probably going to heaven!

Where is the full video?

Smart man on the internet

Can someone explain what he means by the 7 day stay bring beneficial to lose claims??

In norway u dont pay tax on propertys u rent out if its not the house u live in urself

People losing money on AirBNBs just to save like $100 once a year