270. How Investing in Real Estate Reduces Your Effective Tax Rate — Even Without REPS or STRs

Apr 23, 2024

Explore how investing in rental real estate can lower your effective tax rate through strategies like depreciation and creating tax-free income. Learn about backdoor REPS concepts, Lazy 1031 Exchange, tax treatment comparisons, and maximizing tax benefits through real estate investments. Discover wealth-building strategies like 1031 exchanges for tax efficiency and leaving a tax-advantaged inheritance.

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Introduction

00:00 • 2min

Announcement of 2024 Tax Legal and Wealth Summit and Clarification on Backdoor REPS Concept

01:35 • 2min

Exploring Back Door Reps and the Lazy 1031 Exchange for Tax Efficiency in Real Estate Investing

03:36 • 4min

Comparison of Tax Treatment: Earned Income vs. Rental Properties and Benefits of Depreciation in Real Estate Investing

07:51 • 3min

Maximizing Tax Benefits Through Real Estate Investments

10:24 • 18min

Maximizing Wealth Through Tax-Efficient Real Estate Strategies

28:18 • 6min

In this episode, Ryan and Thomas explain how simply investing in rental real estate reduces your effective tax rate and puts you in a favorable position even without offsetting non-passive income (e.g., W-2 and active business income), including: - A snapshot of the US Tax System. - The critical role of depreciation in shielding income from tax. - What is the effective tax rate calculated? - How passive investors build "tax-free" income through real estate. - Ways to minimize the impact of depreciation recapture. If you're concerned using real estate professional status (REPS) or turning losses non-passive with STRs is the only way to use real estate to minimize taxes—this episode is for you. To become a client, request a consultation from Hall CPA, PLLC at www.therealestatecpa.com/podcast Reserve your Free Ticket to the 2024 Tax, Legal, and Wealth Summit at www.taxandlegalsummit.com Apply to join the Hall CPA team at www.therealestatecpa.com/careers Follow Us On Social Media Subscribe to our YouTube channel: www.youtube.com/c/therealestatecpa Join our Facebook group: www.taxsmartinvestors.com/facebook Subscribe to or weekly newsletter for more tax tips: newsletter.taxsmartinvestors.com/podcast Follow Thomas: twitter.com/thomascastelli_ Follow Ryan: www.linkedin.com/in/ryancarriere/ The Tax Smart Real Estate Investors podcast is for general information purposes only and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Information on the podcast may not constitute the most up-to-date legal or other information. No reader, user, or listener of this podcast should act or refrain from acting on the basis of information on this podcast without first seeking legal and tax advice from counsel in the relevant jurisdiction. Only your individual attorney and tax advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this podcast or any of the links or resources contained or mentioned within the podcast show and show notes do not create a relationship between the reader, user, or listener and podcast hosts, contributors, or guests.