The #1 Real Estate Tax Loophole | Pay ZERO Taxes in 2022

[@nataliameyer3633]

Fantastic Information. I am going to listen more than two times, and squeeze it like a fresh lemonade.

[@diesur7126]

Tax, accounting, rental real estate, all my best subject all in one video!

[@Robuilt]

Matt is the absolute 🐐 when it comes to real estate tax strategy 🤯🤯

[@janellittle2323]

I wanted to leave a five star review for Rob but it still shows Brandon and Josh as hosts 😂 Another killer show guys. Matt is the tax whisperer!!

[@stefanimokris9399]

I shared this episode with my real estate investor's group to make sure they wouldn't miss it. Having a STR was low on our list, but last week we contacted a realtor and already started searching for potential properties at Jersey Shore. Thank you for all you do!

[@daphnehill8444]

🤯 Cost Segregation?! Brains blown all over the place! Thanks, Matt, for making these concepts digestible for everyone. I’m an artist, and I get it, so that’s really something. 🏆 David and Rob, thank you for sharing your knowledge, tips, and (we’ve REALLY gotta rebrand this word) “loopholes” with your followers. So greatly appreciated! 🙏🏻🔥🙌

[@spencerhall4452]

Don’t get to excited, you will get about 15% of the purchase price in the first year of a multi unit. The idea of 100,000 is over estimated

[@ChrisRWhitten07]

Great info. You guys have helped me begin the process of generational wealth and knowledge.

[@thenewwayhome]

This is why we have to listen to informative podcasts such as this one. Loaded with so much valuable info and insights from Matt, an incredible guest! House hacking is absolutely a great way in building your wealth as a starter.

[@PaulPlasencia-yf2ms]

I really enjoyed listening to you guys. As a new short term rental owner this information was so detailed and informative for me. Thank you.

[@meshiahenderson8183]

This was an amazing episode. I took bonus depreciation for my vehicle last year. My question is, could you update the vehicle, example go from a 2018 truck to a 2021 truck and take bonus depreciation for the new vehicle?

[@jjohnson2912]

Omg! 😮The amount of free knowledge in this episode is beyond amazing! Thanks BP; you’ve melted (to expand) my mind once again!

[@ivosilva9366]

This lesson is worth GOLD! Thanks BP for another awesome podcast.

[@rhondawillock1457]

Hold a wolf by the ears, turn a primary home into a rental and cost seg., depreciation is a super power! The list of hot takes and killer ideas in this podcast is epic! I can’t believe I get to listen to this for free and soak up knowledge from real estate investors at this level! Thank you guys!

[@spencerhall4452]

5000 for a cost seg report

[@ToddBizCoach]

@@spencerhall4452 do your homework cost segregation reports are available for as little as $1500. It’s not rocket science.

[@AlexanderTate.]

Thank you all for these videos. Everyone who watches should at least be giving it a thumbs up.

[@absoluteqw]

These conversations and this format are my absolute favorite. Also, I always heard it as "grabbing the bull by the horns".😊

[@TheSteveWilliamsShow]

In my back yard lol I love listening to Rob and David Greene, don’t get me wrong I love Brandon Turner also I’m just so glad the show didn’t go downhill that it’s stayed the same just packed full of value. Thanks guys and thanks Matt

[@kimhimes3244]

Fantastic info and so easy to digest the way it is presented here. My one question is always if I take all these deductions, especially against my husband's W2 (I'm a RE Broker and we have rentals and do flips), won't that hurt me on the income presentation for loans? Or am I just now locked into non-qm products so I don't have to consider that...

[@2123tfl]

ur tax depreciation doesnt *necessarily* have to reduce income with lenders. ask ur cpa!

[@imnickcooley]

Hey Kim, I’m a broker and investor as well and my spouse is a W2 employee, I’m not a tax professional.. however, in my experience, these passive losses have always been added back into my income by my Fannie/Freddie lenders.

[@joybeatrice5504]

A simple “tax preparer” is not always “in the know” about this I paid one 3,000k and now want my money back. I hired a tax strategist advisor from Tax Hive she didn’t know the loophole

[@tax-modern]

Yeah... unfortunately most CPAs and tax preparers who are generalists have very limited knowledge of tax strategies for real estate investments. I commonly see returns where they put short term rental income on the wrong form, didn't know that STRs use a different depreciation period, or they didn't correctly calculate the cost basis when buying a property (including acquisition costs but subtracting the land value). It's definitely a good idea to use a tax professional that specializes in real estate investments.

[@entnous53]

How do you find a Tax accountant that knows about this “loophole”, about bonus depreciation and cost segregation? Our CPA just tells us that rentals are Passive income so you can’t deduct. Anyone in Houston that knows this stuff? Is there a way to find an expert in this stuff in Houston?

[@tax-modern]

@@entnous53 I'm located in Austin, but I do tax prep for people anywhere in the US. But if you do need your tax preparer to be local, you might be able to find someone by Googling something like "real estate tax professional houston".

[@mhjg83]

Let's keep you on top top top of the charts! You have extremely valuable content! Thank you guys

[@kevinbarba3266]

Absolutely amazing episode guys!!! 2 questions... #1 - For the new investor do you need a business entity in order to take advantage of cost segregation? #2 - Does having a cost segregation done for a new build (that will be used as an Airbnb) make sense, or should it be done only when buying an older home, or maybe a "newer" build that is a few years old?

[@tax-modern]

If the entity is an LLC, a single member LLC is always disregarded for federal tax purposes, so that makes no difference. And you don't want to put a rental in a corporation. Yes, a cost segregation study can make just as much sense for a new build as it does for an older home.

[@Andys_Auto]

I may have said this before but Rob has the best quick tip intro. I didn't hate the old high pitched voice one from back in the day but I love the "Qu qu qu quick tip". It sounds awesome keep that one

[@AnupamMondal.]

So much value. Thanks to all of you❤️🙏

[@Oregonluver]

What if you are employee working for a development or acquisition and etc firm? Would that count since your job is within real estate so does that count as hours for your REP

[@buhr1mm1]

How much does it cost usually to do a cost seg. for a single family home? If you purchase an inexpensive home say 100k or so for a long term rental property with hardly any renovations needed... how is it worth doing a cost seg or would you not in this case? Thanks!

[@LittleMountainLife]

One of the best podcasts anywhere ever! Great episode guys!

[@scottkidd1969]

Thank you, taxes always have per planning, planning, pivoting and execution to maximize your investment strategy.

[@andyhwell8419]

I was laying down in bed planning to watch this while falling asleep. Ended up turning the lights back on and was taking notes. lol. A lot of good info here I didn't want to let go.

[@insightfool]

As a homeowner, I like your advice but let's be honest here... STRs DO play a very active role in removing affordable housing stock from communities. Essentially, anyone who is not able to own property in the place they live gets priced out of the neighborhood.

[@theprofessionalist23]

He explained the Real Estate Professional status Perfect!!!!

[@meganoleary584]

Wow what a great episode! My husband and I just signed up for his advisor service I cannot wait till our first meeting❤

[@shsu7426]

Hi, I am a 1099 freelancing musician, and will start an STR in the lower level of my home the next 30 days, and then early next year a MTR or LTR with my former house. Which plan of the QuickBooks online do I need? Thank you for your help!

[@andrewhenley5250]

You! GUYS! ARE! AMAZING!

[@obsessedwithsuccess6510]

Amen

[@LHarris3000]

Can you simply use your county property & land assessment amounts & adjust for improvements instead of getting a seperate cost segregation study?

[@hamydinh4062]

Thank you so much. Love this episode. I learned so much.

[@manatee419]

Here's a food for thought. 1- You get depreciation for your rental property because the life of the product. 2- If you do not improve the unit how could it appreciate in value. 3- Would you not have an argument with the appraisal tax man for the of depreciation value?

[@lorenazaragoza6411]

Great content. Matt is the right person to put on your show-cool vibe and very knowledgeable in his field. He’s a handsome young man as an added bonus!

[@ExplorandoJapon]

I am very impressed with the quality of information provided. A big shout out to you all, Matt you are a hero for many.

[@Li-pingMiao]

Very informative. Thank you all! question: Can people use passive income loss off set retirement income, such as RMD or SS income?

[@entnous53]

I need to know this too, good question!

[@tax-modern]

Maybe. Passive income isn't in the same tax bucket as retirement income. So the default answer is no, unless you meet an exception. You could deduct passive rental losses if you qualified to use one of the exceptions they mentioned (real estate professional status or the "short term loophole"). There is also a special exception where if your income is under $150,000, you can deduct up to $25,000 of your passive real estate losses from your other income (it phases out starting at $100k/year).

[@jk6343]

So can you Guys explain what happens when a Leander is looking at your taxes and see that your income is much lower because you took all the looses?

[@kevinnorthrup8485]

Amazing interview! Highly engaging all the way through. Would love to see a part 2!

[@jamescrenshaw5097]

This was really good! Note, there is a strategy out there for those who have been in a principal residence for awhile and then go rent their properties out for 2-3 years to preserve the full benefit of the section 121 housing exclusion. Also, I have heard advice given that is based on Year 1, with all the bonus deprecation, being the only year that you have a tax loss for a given rental property....defer hiring a property manager in the first tax year, to qualify for material participation, claim the loss, then go ahead and hire the manager and no need to qualify for material participation in future years

[@Alfauram7290]

I purchased a property (triplex) in California for 745k. The tax assessment says the land is 625k while the structure is 120k. I didn’t even get to depreciate anything because the numbers looked very inaccurate to me. Can you explain what’s the typical ratio for land/building?

[@moharules123]

If you buy the property with a mortgage ( say fha) with 5% down , can you still deduct 30% of property price ?

[@Behindebars]

Can you only cost segregate in the first year of owning the property??

[@beachbumucsd]

New to this…I like the idea of paying no taxes. Wouldn’t you run into a big problem qualifying for another mortgage/buying another house if you have zero income? Maybe I am missing something

[@dannykent6190]

Yes. If you're using bank loans for your investments, zero tax liability is a terrible idea. But the strategies are still good to know. You can use as few or as many as you like and can potentially have a lot of control over what your on paper "income" is.

[@tax-modern]

Mortgage lenders will generally add the depreciation back in when calculating your income, so it usually shouldn't matter. I'm not a mortgage broker, I'm a tax professional, but that has been my experience with qualifying for mortgages.

[@johnnyb33good21]

i own 41 multifamily units in the Phoenix Arizona metro. would you be able to talk about the NEGATIVES of writing off too many expenses & sheltering your income where it appears you make very little which can hurt you when it comes to qualifying for loans & buying more property. thank you for the help

[@knedd88]

I agree as accountant he right taking to many losses will impact you debt to equity ratio to continue to buy rentals or homes… thus will work for hard money or private since venting is done on property not you debt

[@jrmathewsrealtor]

@@knedd88 Is there any magic button here or is the choice : Pay high taxes & get a loan from traditional lenders or pay low taxes & do not get a loan from traditional lenders...?

[@christobar]

David what you are describing is an economic engine, and it is the #1 reason why real estate is so powerful.

[@leahmthompson1987]

Thank you all for the great information 😊

[@nickbrunette8292]

How does this strategy of taking bonus depreciation against your w2 income affect getting approved for conventional bank financing for property? Since I'm writing off big losses against my w2 income cant I not use that income to get approved for a loan to buy my next property or do banks add back the depreciation. I've heard it both ways, how are you guys navigating this? Besides getting private money or creative subject to/ seller financing.

[@TonyCook7]

Banks aren’t looking at that. They are looking at your income and debt to income ratio. Why would you taking depreciation have anything to do with that?

[@jrmathewsrealtor]

@@TonyCook7 This has consistently been a problem with lenders I work with. It seems either investors take no deductions & pay a wild amount of taxes & get a loan or take lots of deductions, pay lower taxes & are not able to get a loan. There must be something that I'm missing or doing wrong & would love any suggestions. Maybe I'm not shopping through enough lenders or having the right conversations with them?

[@evgenyonishkevich8494]

One of the best shows

[@estherkelly3265]

Can I cost segregate a condo that I've owned for 18 years and have been taking the straight line depreciation?

[@kyunghogan7717]

Purchased house Dec 2022,after rehabbing can do 1031exg?

[@LHarris3000]

How do you give a bookkeeper access to manage your finances without giving them authorization to withdraw funds from your accounts?

[@enriquemato229]

Hi Guys! Great info! Very eye opening! Quick question. Are you able to do a 1031 if you've already done a cost segregation? Thanks!

[@ryangrenz7347]

Yes, thats one of the reasons to do a 1031and defer taxes

[@jplintech]

So you can buy depreciation?

[@makeitmakecents856]

Woah that STR tax loophole is huge. You can use that on the rental unit of a duplex you occupy? How much does a cost segregation cost?

[@bdcarte1]

Does this still apply to midterm rentals??

[@ToddBizCoach]

Talk about new construction of STVR and material participation.

[@Khanh.Nguyen369]

Mind blown. Thank you guys

[@dylanduimovich5873]

Thanks for sharing the details! Can you use STR depreciation if the airbnb is your primary home and you rent it out (less than 7 days on average) for a total of 60-90 days per year?

[@tammy_160]

On the real estate pro status discussion. Spouse #1 can't take it as you say my husband works 70-80 hrs per week and can't spend more than half their time in real estate. However, spouse # 2 (myself) who doesn't work can. Correct? UNLESS here's my scenario and question I have not heard anyone ever comment on. If spouse #2 doesnt work because they are on disability they cannot claim real est pro status (VS being a passive participant which is "ok") because they can technically lose their disability, is my understanding correct?

[@reyessuarez4978]

Amazing! Now how I get my account to do all of this? I will paid him to watch this video then Apply this strategies

[@medicationeducation6891]

I stay in Michigan and just starting out is there a way to have a CSR done on single family

[@heated6344]

Thanks for the information. Agree why write a check to a government who just throw it away. Love you guys!

[@damianmussi2362]

Hi thanks for the video very helpful! I have a question. If I buy a Single family home in florida, and I dont want to rent it the whole year, but I want to use cost segregation... I can buy it in May and rent it idk... 1 week (Is there a minimum of days in the year or minimum of different peoples to rent?) So after Jun I dont rent it anymore could I do the cost segregation or to do this the house has to be actively used as short rental? Thanks

[@scnager1]

What are the provisions on NOL carry forwards after you do cost segregation?

[@laceyriley5426]

Real estate investors potentially can pay no federal income taxes, because of all the benefits in the tax code, but it is more complicated than what is discussed here. There are differences between ordinary trade or business income and passive income and how deductions are allowed based on the type of income. In order to depreciate vehicles the vehicle must be used at least 50% in the business and commuting mileage doesn’t count toward business use. If you are a serious real estate investor - business structuring is key. The IRS has not been auditing for probably the last 10 years or so, but that is coming to an end. This CPA is very aggressive and looking at his age I will assume that he has never had one of his real estate investors/developers audited by the IRS. Nothing wrong with being aggressive as long as you keep great records and are informed of the risks in certain positions you are taking on your tax return.

[@The1SimLash]

Excellent idea guys! Turning your primary into an STR sounds excellent. Maybe even house hack the primary/STR

[@jamilball6463]

What’s a cost serration ?

[@kevinbriggs9143]

I brougth My house 12 years ago thru FHA and now I rent it out, Can I take out another FHA loan to buy another house

[@melansaloon]

From my understanding, to be eligible for bonus depreciation one must spend more than 50% of their working time in real estate. That is, you must be spending more time working in real estate vs. a W2 job. This disqualifies me to make use of this tax loophole because I only have 1 rental property and work 30-40 hrs/wk at my W2. (I am in California)

[@robertfowler2115]

I work as a property manager for an apartment community as my W-2 job and also have my real estate license and manage my own rentals which I own. Can I argue that I'm spending over 50% of my time as a "real-estate professional" being that my profession is is real estate? Technically 100% of my time is spent as a real-estate professional. That way I can used bonused depreciation to offset my W-2 earnings. 🤞🤞🤞

[@mtigress4589]

The W2 hours won't count and it actually works against you.

[@joybeatrice5504]

What qualifies someone to become a tax strategist?! Mine knew less than me and I just bought a STR investment property in 2022 I need a higher quality qualified person

[@FlyingTrain-py5bz]

Accounting and bookkeeping isn't boring!

[@tracy3066]

I heard Section 179 for a car over 6,000 pounds is being phased out. ☹️ Starting in 2023 it’s going down to 80% then to 60% and then not sure after that.

[@toldenfr]

Does this kind of expertise exist in Canada? (for distinctive depreciations of all house components) Same question about taxes strategies expertise. Thanks

[@LittleMountainLife]

Someone correct me if I’m wrong, but does the 20 year depreciation deal for str work especially well for writing off glamping dome tents?? They have a limited lifespan under 20 years so it sounds like buying and setting up a dome glamping for str would be eligible for a 100% deduction through depreciation.

[@erikg666]

One of the best episodes!

[@natalytam641]

Thank you so much for awsome free informations.

[@KC17SG]

Perfect video all around.

[@alexschultz162]

In order to get the $250k primary residence tax benefit when selling, do you have to live in a property for 2 consecutive years out of the 5, or can the time be accumulated? For example, live in year 1, live out year 2, live in year 3, live out 4 & 5

[@funkthat]

any 2 out of the previous 5 years

[@TheZeedler]

So even if I depreciate I still have to pay taxes on W2 income? How can I avoid that? Gotta find me a cpa stat!

[@ryangrenz7347]

For the STR tax benefit, there doesn't seem to be a minimum rental income limit. If I follow correctly, i can offset my w2 income $100k by cost seg of lets say $150k even with minimal rental income of 10k if I meet material participation. So I'd end up with an net loss of 40k correct?

[@carlhull2395]

Great episode. Worth an hour of your time.

[@mykidsmom7767]

Can I depreciate a STR I purchased in August and have been renovating? I will be into the home 500K, but may not get it rented before Dec.? Help!

[@jane5570]

Great knowledge and fantastic information helping everyone.Thanks.

[@JohnnyParkenstein]

Amazing episode.

[@MikeAIright]

but the property taxes keep going higher so elderly people get squeezed out and also you also make it more difficult for first time home buyers to get in.

[@discoveryoutdoorskcfishing236]

"Grab a bull by the horns" is what we say in the south and it refers to when a bull tries to challenge you. You can grab the horns and basically jump up and down with the bull moving around until you can escape but as soon as you let go he is after you.

[@kerryarmstrong5565]

What if your house hacking a duplex can you do that on one side or both?

[@viraestrada7756]

That was awesome information. My mind is spinning!!

[@sriram-akella]

Can you do cost segregation in the following or later year ( not in the year purchased)

[@mattbontrager]

You can do it the following year!

[@dawnbloomingdale5700]

What happens if you take the loss then leave it to your heirs. Is there a step up in basis on rentals for your heirs when you die?

[@tax-modern]

Yes.

[@GuysGoneViral]

Does the 6000 pound car weight loophole apply in Canada?

[@andyO4you]

Can you segregate a property that you bought over 1 year ago or a car for rhat matter?

[@bradymyers9710]

But if you pay zero in taxes how are you supposed to be “bankable” are use one of my small local credit unions And they argue that I need to pay taxes in order to stay bankable

[@bradymyers9710]

The question is pre-listening to this podcast so maybe my question will get answered

[@jrmathewsrealtor]

@@bradymyers9710 Is this questions covered in one of the podcasts?...any idea which one?

[@jddesigns7135]

If my w-2 job is as an interior designer, does that qualify as a real estate professional?

[@mtigress4589]

W2 hours do not count and work against you because now you need more hours than your w2 job to qualify

[@kevinbriggs9143]

can I write off eviction and lost of rentals( I had a tenant that didn't pay for several months) can I write off my loss

[@richdibo]

How are calculating your loss? You can't deduct an economic loss for the forgone (uncollected) rents.

[@nimasafapouresq.3630]

Great episode!

[@MrJoelMartinez]

Thank you for this !

[@tinamcdonald2629]

How do you find that person