Why You Should Never Pay Tax on Your Real Estate Investments

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Real estate is the best type of investment you can make from a tax perspective. Watch this video to understand why you should never pay tax on your real estate investments if you set everything up properly. I walk through how to avoid paying income tax on rental income and strategies to avoid capital gains tax on appreciation in the property value.
Asset Allocation Series Part 6: Real Estate Investing ▶️ • Asset Allocation Part ...
Buy, Borrow, Die Tax Strategy ▶️ • Never Pay Taxes Again ...
Video Contents:
00:00 - Intro
03:27 - Depreciation Deductions
05:09 - Bonus Depreciation
07:28 - Interest Expense Deductions
08:55 - Treating Real Estate Properties as a Business
10:23 - Access Appreciation without Selling Property
14:04 - 1031 Like-Kind Exchange
⚠️ Exercise caution before using this strategy. Do your own research and make sure you fully understand the risks you are undertaking!
💡 I do not work with clients or offer any consulting services. If you want to learn more about the best tax and investment strategies, subscribe to my channel and check out these courses ▶️ sharonwinsmith.com/courses/
The information provided in this video is owned by Winsmith Tax LLC and is solely for informational and educational purposes. It is not intended as investment, legal, or financial advice. Always consult with a professional familiar with your unique situation, or conduct your own research before making any decisions. We might receive commissions for recommending certain products or services.

Опубликовано:

9 июл 2024

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Комментарии : 19

@ufuksenol2005 Месяц назад

To be a successful business owner and investor, you have to be emotionally neutral to winning and losing. Winning and losing are just part of the game. Risk comes from not knowing what you are doing.

@PineHosting Месяц назад

People dont understand that the prices of things are never going back down. This inflation is deeper than we think. Those buying groceries are well aware that the real inflation is much over 10%. The increments dont match our income, yet certain investors still earn over $365,000 in stocks and assets. Wish I could accomplish that.

@vanillatgif Месяц назад

Very possible! especially at this moment. Profits can be made in many different ways, but such intricate transactions should only be handled by seasoned market professionals.

@grizbaseball Месяц назад

Finding yourself a good broker is as same as finding a good wife, which you go less stress, you get just enough with so much little effort at things

@katiekilbo Месяц назад

Sounds interesting. I was planning to invest some few £ in some coins, stack them up and leave them for a few years, but seeing this changed my mindset. Thank you very much

@faysdt414 Месяц назад

My 401k lost everything it's gained since early 2019. Sigh, wouldn't mind looking into the person that guides you, I'd really love to grow my reserve seeing I should be retiring in 3years.

@MyWillbot Месяц назад

I’m in a situation where our cash flow is too high and the depreciation too low, where I need to really do a 1031 to raise my depreciation across 2 properties. But the cost is relatively high to sell. But “scared money don’t make money” so I’ll likely have to update the first property in order to move onto 2 in a 1031 situation.

@jimdefazio8649 Месяц назад

I was in the same boat. Got some places in Florida that were much more expensive than the houses I was buying. So they will have much more depreciation to offset rental income.

@jimdefazio8649 Месяц назад

And as long as the rent pays the mortgages or slightly cash flow, the paper losses will help offset and lower tax liability.

@jjohn662 Месяц назад

Hi, Sharon, could you do a video where you talk about offsetting 401K (or IRA) ordinary income during retirement with activities like owning a business and the deductions that can come with it? Maybe I want to start a new business in retirement. Or owning a short term vacation home rental with the accelerated depreciation and cost segregation to offset having too much ordinary income coming out of a too big of a 401k (or IRA)? You don't have to talk about the mechanisms themselves. There's plenty of other RU-vid out there on those two topics. Rather, could you talk about if it's even possible to use those mechanisms to offset ordinary income from a 401K (or IRA) being taxed during the retirement years? Everywhere else on RU-vid they tell you to use the bucket strategy to massage tax tiers. I'm more interested learning about if you can avoid the higher tier ordinary income taxes from the withdrawals from a mega 401k (or IRA) and later RMD's and convert the would have been paid taxes into equity via depreciation losses in a short term vacation home rental (think of oceanside Maui), that eventually gets a step up in basis passed my heirs. Keep posting, great content.

@THUNDERIN78 Месяц назад

YOU ARE AMAZING 🤩 Thank you sooooo much for caring enough about us to share your experience and wisdom. You are a 🎁 to us all. Do you have any resources, or other intelligent, responsible people that we should seek out in addition to listening to you?

@MarcioSouza1 13 дней назад

I ran some numbers for a hypothetical scenario where I'm invested in a RE fund, and couldn't get to taxes being zero. Am I missing something? Assume $100K invested, 7% cash-on-cash return (from another one of your videos), 39-year straight-line depreciation, and 80% of property (vs 20% land): (1) I'd get annual distributions of $7,000 (2) Depreciation deduction of $100K x 80% / 39 = $2,050 So deduction here is only ~30% of distribution. Of course it could be more in year 1 with Bonus depreciation, but that's a one-time thing if I understand it correctly. So how exactly do you get to ~0 in taxes? Or does this only apply to owning RE directly, and not via a fund?

@bryanharrell4059 Месяц назад

Great info, as usual. A nice high-level overview. I would guess no need to worry about recapture unless not going to pass the home to heirs, but would it effect a 1031 exchange? Switching gears: Finding a syndication would be nice but I think many of the investors on RU-vid learning aren't at the level they'd be accepted. Investors will need to grow to that level, and that's the 'awkward' stage. Basically just enough but not quite enough to level up. Many thanks for the excellent content.

@priestesslucy3299 Месяц назад

It sort of affects a 1031 You have to 1031 into a property that has depreciable assets with a value at least equal to the depretiation you're carrying, or the deficit gets recaptured

@jimd1617 Месяц назад

thank you

@fdunayer Месяц назад

Having bought real estate at the high's in the early 2000's, depreciation recapture for me is a bigger issue than capital gains. Would you do a video on that?

@jimdefazio8649 Месяц назад

Never sell and you’ll never have depreciation recapture. If you need cash out, cash out refinance or pull a line of credit from the property.