Real estate investors, developers and operators can make millions a year and pay almost nothing in TAXES by utilizing a loophole called Bonus Depreciation.
A thread on how it works:
Real estate is one of the most tax advantaged investment strategies out there.
Real estate pros buy property using leverage and bonus depreciate to perpetually defer taxes.
Making millions a year and often paying $0 in taxes.
Short Term Rentals supercharge this:
🧵👇🏼
Real estate investors, developers and operators can make millions a year and pay almost nothing in TAXES by utilizing a loophole called Bonus Depreciation.
A thread on how it works:
The tax lifecycle of real estate:
1. Buy with leverage
2. Cost segregate and depreciate initial capital in
3. Stabilize and borrow tax free against asset
4. Enjoy low tax cashflow year over year
5. 1031 exchange into larger asset, repeat
6. Die and step up basis
7. Heirs repeat
The tax lifecycle of real estate:
1. Buy with leverage
2. Cost segregate and depreciate initial capital in
3. Stabilize and borrow tax free against asset
4. Enjoy low tax cashflow year over year
5. 1031 exchange into larger asset, repeat
6. Die and step up basis
7. Heirs repeat
I know many real estate investors who make $1-2 million a year in free cashflow and haven't paid income taxes in years.
Zero tax liability.
They just buy a building or two every year, do a cost seg, bonus depreciate a big chunk, shield that income.
America is wonderful.
Big news:
Have you ever wanted to estimate how much money you could save in taxes by doing a cost seg study and taking bonus depreciation on your specific property?
Well, now you can!
We built an interactive calculator where you can input the details of your exact deal
The playbook of so many wealthy clients of mine:
1. Cashflow from business
2. Invest in real estate
4. Depreciation & cost seg shields small biz income
5. End up with a lot of cash and very little tax.
We agree.
Here’s a better method:
1. Buy property
2. Cost segregate and depreciate the purchase price
3. Use that loss to offset the income
4. End up with all cash and little to no tax
5. Repeat
We help our clients do this every day, all day.
Most people:
1. Earn income
2. Pay 30-50% taxes
3. Live
4. Invest whatever is left
Notice the inefficiency.
Better to figure out how to get each hour of work to grow net worth, without going through the IRS tollbooth.
The tax saving jackpot:
A high W2 income earner or business owner married to a real estate professional.
Cash from business / w2 + losses from real estate investment and cost segregation = all cash and no tax.
A common question we receive from clients is,
“How much will I save in taxes this year if I buy real estate?”
Here is a framework to think about how buying properties create the most tax efficiency for you.
THE 5 LEVERS OF DEPRECIATION
A client of mine:
Passively owns a biz generating $1m+ in profit for him each year.
Owns and buys real estate every year and gets a big chunk of bonus depreciation.
Pays NOTHING in taxes each year.
The ability to compound wealth this way over time is mind blowing.
Real estate investors can make millions a year and pay almost nothing in TAXES by utilizing a loophole called Bonus Depreciation.
A post on exactly how it works (and how you can utilize it):
Depreciation is the act of slowly, over time, deducting the initial expense of an asset