Nathan Sosa, a tax advisor and expert for real estate investors, shares groundbreaking tax strategies that can save you a fortune. Discover how land banking can be a powerful long-term play, along with advanced 1031 options like reverse exchanges. Sosa highlights niche deductions including solar credits and casualty losses, while also warning about pitfalls like the 3.8% Net Investment Income Tax. The discussion wraps up with practical year-end action items to optimize your tax strategy for 2025 and avoid expensive mistakes.
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insights INSIGHT
Land Banking Is A Long-Term Capital-Gains Play
Land banking is a long-term play: buy land in an area you expect to develop over 5–20 years.
Gains on holding land are taxed as capital gains, often much lower than ordinary income rates.
volunteer_activism ADVICE
Use An S Corp Sale To Preserve Capital-Gains Taxation
If you plan to develop land yourself, sell it to a related-party S corporation before developing to lock in capital gains treatment.
That step-up in basis can avoid ordinary income treatment on later sales of developed inventory.
insights INSIGHT
Basis Step-Up Can Yield Huge Tax Savings
Stepping basis up before development can save a large percentage of taxes compared with ordinary income rates on inventory sales.
The IRS scrutinizes these transactions heavily, so proper steps and documentation matter.
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In this episode of the Tax Smart REI Podcast, Thomas Castelli and Nathan Sosa break down under-the-radar tax strategies real estate investors and high earners can use to cut their tax bills—plus the mistakes that quietly cost people thousands.
You’ll learn:
- How land banking works, who it fits best, and why it can be a powerful long-term tax play
- The advanced “1031” strategies including reverse and improvement exchanges to defer taxes while upgrading properties
- Niche but huge deductions like solar (only if you own the panels) and casualty losses
- Two common pitfalls: accidentally triggering the 3.8% NIIT and missing the §469 grouping election that can trap losses.
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Tax Smart Real Estate Investors Podcast