268. How To Turn Rental Losses Non-Passive Without Material Participation with Justin Shore, EA
Tax Smart Real Estate Investors Podcast
Potential Risks of Using the Backdoor Reps Strategy
Using the backdoor reps strategy may pose risks for investors, particularly if they have minimal long-term capital gains attributed to a property sale or if they are in a lower tax bracket. In such cases, the benefits of the strategy would be diminished. Additionally, as bonus depreciation approaches zero, it becomes harder to fully implement the strategy. This challenge may become more significant in the future, possibly around 2026 or 2027. Furthermore, the effectiveness of the strategy is influenced by the level of bonus appreciation, with lower rates potentially affecting its applicability in the coming years.
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