Most people invest in real estate for cash flow or appreciation, but there are enormous tax benefits as well. In this episode, we’re going to share the number one tax strategy you need to know about—the short-term rental tax loophole—which could save you thousands!
Welcome back to the Real Estate Rookie podcast! Today, we’re joined by Sean Graham, who is not only a certified public accountant (CPA) but also a fellow real estate investor. He’s going to show YOU how to avoid paying Uncle Sam (legally) with just a few savvy tax strategies. The best part? You don’t need to be a big-time investor with a large real estate portfolio to take advantage of these benefits. Even if you have just ONE rental, these strategies are for you!
First, Sean will share the ins and outs of the cost segregation study, which allows you to frontload depreciation rather than spreading it out over the next few decades. He’ll also get into bonus depreciation and the different line items that qualify, as well as the tax “loophole” that allows you to use tax deductions to offset active income—yes, including your W2 wages!
In This Episode We Cover:
Offsetting active income (and saving thousands) with the short-term rental loophole
How to avoid paying taxes (legally!) on your rental property
Cost segregation studies explained (and when you should get one)
How to retroactively claim depreciation through a “look-back” study
Why you can have as little as ZERO taxable income and still be lendable
And So Much More!
Links from the Show
Ashley's BiggerPockets Profile
Tony's BiggerPockets Profile
Join BiggerPockets for FREE
Real Estate Rookie Facebook Group
Real Estate Rookie YouTube
Follow Real Estate Rookie on Instagram
Cost Segregation 101
Get Early Access to Real Estate’s Biggest Event of the Year, BPCON2025
Maximize Your Real Estate Investing with a Self-Directed IRA from Equity Trust
Download the Cost Segregation 101 Resource
Buy “The Book on Tax Strategies for the Savvy Real Estate Investor”
Find Investor-Friendly Lenders
Connect with Sean
(00:00) Intro
(00:36) What Is Cost Segregation?
(06:33) Short-Term Rental Loophole
(13:10) Other Strategies & Pitfalls
(20:21) Bonus Depreciation 101
(25:24) How to Do a Cost Seg Study
(28:05) Cost Segregation Study
(33:28) Connect with Sean!
Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/rookie-521
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