🙅🏻 Pay no taxes with real estate #taxfree #realestate #depreciation
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Published 2022-09-14
💰 Normally when you make money, you need to pay between 20-40% of that in taxes depending on your tax bracket!
🏡 However, if you buy real estate, there’s a good chance that you won’t have to pay any taxes on your rental income.
🔻 This is because of depreciation. Even though your property may increase in value every year, the IRS will allow you to write off 1/27.5 of the structure’s value against the passive income that your real estate portfolio generates.
📉 Depreciation is one of the main benefits of investing in real estate and the beauty is that it’s only a “paper loss” that helps you pay less taxes!
🤔 Will you buy real estate and pay less taxes?
#tax #taxfree #realestate #realestateinvesting #taxes #depreciation
All Comments (21)
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If you are confused, you don't pay taxes on unrealized gains. The taxes are paid when asset in question is sold. The governments always find a way, which is property taxes. Edit: depreciation just distributes an expense over a period of time, so that you can alter how your financials are perceived. Depreciation on its own won't usually put you into a loss.
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- So… why r you in jail? - Because I follow Sean Pan 🙂
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There's a reason the IRS gives you that. Houses are actively falling apart every second and you need to spend money to maintain them.
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Just so that you know - this is absolutely true. The real value of every property depreciates due to the constant need to renovate and maintain the property. It is only inflation that keeps the estate rising in price for the customer, not the value of the property in terms of quality.
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You didn’t talk about recapture when you sell though! So better to put those gains in another asset.
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So as a CPA, I must advise that any depreciation you have taken during the course of owning the rental property will all be captured back as ordinary income when you eventually sell the rental property, which get taxed as high as 37%, plus the part of property increasing in value, which get taxed as capital gain at 15%, so by no means is this as tax free as you suggest. Yea the government is not that dumb.
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It’s called a non cash deductible expense. Aka depreciation. The downside is you are lowering your cost basis in the property so when you sell you will have to pay more cap gains tax. This strategy is still very good though
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This is why rent is so high not a money is good money but shitty people are going to do shitty things no matter how much you donate doesn’t negate your part of the problem
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Lol “according to Zillow…” said no real estate or financial professional ever.
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“Fine who taught you this” way to steal erikas line lmfao
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"We better increase rent again this year to stay net positive" Never fixes anything in any building and lets it get run down so they can claim losses on investment
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It sounds like the depreciation rule was from a time when a majority home owners actually lived at their properties
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Thank you for your amazing videos I hate pay the IRS so I try to do anything that can stick up to them
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Not even the joker messes with the IRS
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As an auditor. Correct.
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Definitely the most interesting piece of info I've seen you post. Very cool!
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Loved it! 😊
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Depreciation is accounting 101. It's not a trick It's just how it works.
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I'm an investor who parasites off working people for rent money, then does the same to scam them out of tax to build their schools and hospitals
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Worth noting that your taxable gain when you sell is increased by any depreciation you take. You're not avoiding tax, just delaying it.
