Tax Smart Real Estate Investors Podcast
319. 3 Tax Scams to Watch Out for in 2025 (And 2 Risky Strategies to Avoid)
Apr 2, 2025
Dive deep into the world of tax scams targeting real estate investors. Learn why equipment leasing deals often miss the mark and how solar tax credits can be misrepresented. Discover the risks behind inflated art donation deductions and why they should raise red flags. Thomas and Ryan also discuss two high-risk strategies—discounted IRA rollovers and deferred sales trusts—that, while not outright scams, require extreme caution. Equip yourself with knowledge to protect your wealth from potential pitfalls!
27:33
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Quick takeaways
- Investors should be wary of equipment leasing schemes promising non-passive losses, as they often result in costly tax misunderstandings due to passive income classifications.
- While art donations can yield tax deductions, inflated appraisals pose significant risks, necessitating adherence to IRS guidelines to avoid penalties.
Deep dives
Understanding Equipment Leasing Scams
Equipment leasing can lead to significant tax misunderstandings, especially when promoted as a way to generate non-passive losses through depreciation. Usually, investors purchase equipment and lease it to companies, expecting to offset non-passive income or W-2 earnings with the purported losses. However, these losses are often passive, meaning they cannot effectively reduce taxable income from active business earnings. This highlights the importance of material participation in real estate investments; if an investor does not material participate, they should be cautious of claims suggesting otherwise, as such scenarios often turn out to be scams.
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