BiggerPockets Daily How You Can Legally Minimize Your Taxes Using Real Estate
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Dec 14, 2024 Discover how to turn taxes into a landlord's secret weapon! Learn about leveraging depreciation and deductible expenses to boost your rental income. Explore the benefits of 1031 exchanges for deferring capital gains taxes. Gain insights into appealing over-assessed property values and maximizing tax efficiency. Plus, uncover helpful tools like Baselane to simplify bookkeeping and tax prep. Get ready to transform your approach to tax season!
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Tax Advantages for Landlords
- Leverage depreciation: deduct wear and tear over 27.5 years, reducing taxable income.
- Deduct operating expenses like insurance, taxes, and mileage to lower your tax bill.
Mortgage Interest Deduction
- Deduct mortgage interest but remember principal paydown isn't deductible.
- Being debt-free eliminates the mortgage interest deduction but offers financial freedom.
Active Management Benefits
- Actively managing your property (750+ hours/year) can qualify income as active, not passive.
- Consult a CPA to ensure you meet the criteria for active management and maximize deductions.