Tax laws can be so complex, and it’s super helpful to break them down like this. Understanding how different policies can impact our finances is crucial for making informed decisions.
Making profitable investments during this time of political change can be risky without that insight. For me, working with an adviser is the best first step to navigate these complexities and make informed choices.
I think having an investment advisor is the way to go. I've been with one because I lack the expertise for the market. I made over $490K during the recent dip, highlighting that there's more to the market than we average folks know.
The utilization of after-tax money and tax-free growth makes opening a Roth IRA very advantageous. Through a careful guidance of my FA, I did not pay taxes on my withdrawals of $2.86 million when I retired.
I don't regret the numerous financial mistakes I've made in the past since I've learnt from them. But the biggest one was planning my finances without consulting with a licensed financial counsel.
Indeed, I did make use of a financial counselor. As I get closer to retirement, their advice has been really helpful. I thought compound interest on index funds wouldn't be sufficient because I started late. It's amusing how I've done better than colleagues who have more years of investment experience. I've profited more than $886k tax free.
@@maryHenokNft I appreciate the implementation of ideas and strategies that result to unmeasurable progress. Being heavily liquid, I'd rather not reinvent the wheel, thus the search for a reputable advisor, mind sharing info of this person guiding you please?
She's known as *Gertrude Margaret Quinto* One of the finest portfolio managers in the field. She's widely recognized; you should take a look at her work.
Thanks for the advice. The search for your coach was simple. I investigated her well before using her services. Considering her résumé, she appears competent.
I ❤ the way you teach! Specifically, you break the tax laws down for easy assimilation. You also provide overviews and takeaways of the video. Thanks Karlton!
One of the best moves I ever made in my life. Filed taxes this year and was amazed. I’m hooked. Thank you KD. I looked at an in-depth older video of yours end of last year or beginning of this year about this same topic. And an older video on the tax savings on the different business structures. The laws of the universe and attraction are making my goals inevitable.
Hey bud, your videos are money!!!!!🎉🎉 Thank you for all the value. Tell your team to keep up the good work for me. You guys are killing this space. Can't wait for the end of the month challenge. Stay blessed.
Could you please comment on this statement? “Capital gains are not passive income; they are portfolio income. This distinction is essential for tax purposes because it affects how deductions like depreciation can be applied. ” Thank you,
If you choose not to take depreciation on a rental, do you still have to pay it back if you end up selling the property? 2. For high w2 earner, do you still qualify for taking deductions such mortgage interest and depreciations on the rental income?
Great wealth of knowledge. Your explanation skills of this knowledge are on point. Bought an old home in MD for $235k, received 4 lots on one deed with their own tax base. I rebuilt the original home with $200k construction loan and $130k in credit cards. I lived on lot #2 until the rebuild was done and renovated lot #2 as well. Now, I rent lot #2 but it came as one of the gifted lots. I build a work space on the back side of the rebuild to work from. The other two lots are .5 per acre land. I am a self-employed person working from a dedicated space of my home. I did not know I could depreciate my work space (34.23 %) of home. 2021, rented a section of rebuild home (10%) to a friend after closing down my business for six months. trying to understand cost basis to apply depreciation to my home, business and how to file 3115 form for lot #2, I dropped depreciation 1.5 years I had no tenant??
Karlton, as I understand you, since I am an early retiree who owns rental property, I can claim active rental losses on other income such as pension, social security and the sale of other real estate? Plus, I use my spouse, who is a lawyer to manage the property as well as pay her a monthly legal retainer. Am I going in the right direction? Thanks.
Karlton, thank you for taking the time to make this video and share valuable information. It took me some additional research and study to fully comprehend the rule to the point of confidently sharing this with my clients and give them assurance that, if they meet the requirements, the losses could be legitimately claimed. Thanks again.
My client rents out his basement. He’s a travel nurse and outsourced the management. I couldn’t justify him writing off the rental losses. He’d have to be spending 15 hours a week all year to hit that 750 hours. He’s a travel nurse working overtime.
So if I sell the home in 5 years. And they do bonus depreciation recapture, do they just take back all the money I saved on taxes? Wouldn't that just be a wash?
WOW what an education. I’m sold. THANK YOU for your service. I had been wondering for years how to actually use real estate properly for offsetting taxes. Nobody had ever explained or even mentioned any of these topics to me. Wouldn’t have even known what to ask Google. Planning to do this immediately. Thank you!
Been studying the topic of using depreciation in real estate to offset taxes and I was thrown a curveball when I came across the term “real estate professional”. This video came right on time and as always, you do such a great job explaining. I do however, find it hard to believe that the “wealthy” are spending 750 hours a year in real estate or own majority of their real estate in short-term rentals… I could be wrong.
@@karltondennisI'm treasurer on a board of directors of a 400 plus townhome community. So I eat and breathe property management as fulfilling my duty as an almost full time volunteer. Would this qualify me as a real estate professional? Bcuz that would be very helpful in my tax life. Great video!!
We do Airbnb(rent out 1 of our bedrooms. Been doing it for 2.5 yrs. and luv it). But what are all the tax write offs we can use when we do our taxes in Feb.?? Tytyty❤
Hey Karlton - if you have a spouse that doesn’t work, can they claim real estate professional status and then file jointly and use their real estate professional status to use passive losses to offset active income?
To show time in the real estate operations. Can you just open a property management company, hire your own company to manage your business and be your own employee.
This is literally the video that made me follow you… 💪🏽 really appreciate all this information. I look forward to implementing all the strategic tools to my real estate venture. Thanks
Thank you KD amazing content! While researching about LLC for my 4 rental props your channel showed up. I’m hooked so much I’m learning here my CPA doesn’t even tell.
Depreciation is a real concern, the property is losing value year over and year. And at some point the owner will have to come up with a huge sum of money to bring the property back to its original value. Its a paper loss but its not a paper loss.
So essentially if it's not a short term rental, and youre just renting to a tenant for 12-13 month lease agreements, the only benefit to a rental would be the cash flow from the tenant and a person wouldnt be able to take advantage of any potential losses or depreciation? Was thinking about renting somewhere and using my primary residence as a rental, but seems like it may not be worth it?
Just bought a house for rental by students. It is going to be yearly leases. Each year a new lease. My wife works 20 hours a week, so she can be setup is Real Estate Professional Status? She is on a deed. - Subscribed.
Great video. I have owned a short term rental for about 2 years that have taken a loss each year; however I have been told my w2 income is too high to qualify for those losses. Is that accurate?
Can I start a cost segregation study on a property I’ve already owned for several years (when the standard depreciation schedule has already been started)?
Great video. If I purchase a short term rental property, and I spend at least 100 hours, and it's more than anybody else, and I now have an active real estate business, can I now consider myself a RE professional and utilize depreciation losses from another investment as 'ordinary losses' to offset my W-2 and K-1 income? I'm currently (passively) invested in a couple shopping centers that are being remodeled and adding tenants to prepare for a sale next year. I want to be able to capture the depreciation (from the cost seg.) to offset OI. Thanks
So if you buy land and develop it that requires time and resources do build plus it’s only land value so you can claim depreciation on new property? Does this new property then have to be a short term rental property to offset other rental income. And put all properties under one company a managing company? What makes that business a managing company besides managing the rents/landlord duties?
Thank you for this video very helpful!! QUESTION! My tax professional is stating if I put my current rental property (which was my primary residence and I moved out of it to make it a rental) into an LLC and do a schedule C with him when filing I will be able to write off all of my depreciation and losses etc and deduct that from my W2? Is this correct or is he misinformed? He said the reason I cannot deduct it from my W2 currently is because it’s not in a LLC… just want others thoughts.
Link to a video that connects the property management company while remaining within the guidelines of achieving the short term rental property depreciation realization? To rephrase, achieving the 100 hours materially participating but also pairing the property management company aspect?
So we inherited the paid off home next door and I work part time in my own cleaning painting business and husband works full time. So i have the time to invest and want to offset his w2 and my 1099. We dont want to short term. So how would I account for 750 hours?set up a management company? Going to watch that next.
Question: If I qualify as a RE professional & have a short-term rental that I use personally from time to time is there a limit on how many days I may use it for personal use and still take a passive loss via depreciation on that property?
did you ever make the video on creating a management company for dealing with our personal rentals? Any recommendations on finding a cpa that does Cost Segregation study?
Thank you so much! First real estate video I have seen that, not only explains the terms being thrown around but, the actual strategies and the rationale for them.
Can singles that make less than 150k take advantage of this tax code? Also does the property have to be labeled a rental property or can it be a personal duplex
If you’re a W2 earner and your investment property is not making positive cash flow, can you write off your loss against the the W2 income? Is thete a way around this to be able to write off the loss annually?
How do you find out the Land Value vs Building Value? One of my homes burned down. I wonder what it worth now. I hate to ask a realstate agent as they just want to sell it for me. Blow up the real value to get me hooked into siging paper work with them. Then coming around telling to lower the price for real value.
Only question always heard if you file loss to pay less taxes it hurts to show for banks as a good business to be good for a loan ? So is this a good way to declare loss but still get approved for bank loans
Informative video. One thing I noticed missing was the cap on real estate losses. You are only allowed 25k in loss if you make under 100k w2 income. I’ve lost 20k in write offs 4 years straight. How can I get around this cap
![How to Use Rental Losses to OFFSET W2 Taxes! [Part 2]](http://i.ytimg.com/vi/XSflOWt7kZQ/mqdefault.jpg)
![How to Use Rental Losses to OFFSET W2 Taxes! [Part 2]](/img/tr.png)
Tax laws can be so complex, and it’s super helpful to break them down like this. Understanding how different policies can impact our finances is crucial for making informed decisions.
Making profitable investments during this time of political change can be risky without that insight. For me, working with an adviser is the best first step to navigate these complexities and make informed choices.
I think having an investment advisor is the way to go. I've been with one because I lack the expertise for the market. I made over $490K during the recent dip, highlighting that there's more to the market than we average folks know.
Hmmm this is quite interesting, Please can you leave the info of your investment advisor here? I’m in dire need for one.
Nicole Anastasia Plumlee can't divulge much. Most likely, the internet should have her basic info, you can research if you like.
I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get.
The utilization of after-tax money and tax-free growth makes opening a Roth IRA very advantageous. Through a careful guidance of my FA, I did not pay taxes on my withdrawals of $2.86 million when I retired.
I don't regret the numerous financial mistakes I've made in the past since I've learnt from them. But the biggest one was planning my finances without consulting with a licensed financial counsel.
Indeed, I did make use of a financial counselor. As I get closer to retirement, their advice has been really helpful. I thought compound interest on index funds wouldn't be sufficient because I started late. It's amusing how I've done better than colleagues who have more years of investment experience. I've profited more than $886k tax free.
@@maryHenokNft I appreciate the implementation of ideas and strategies that result to unmeasurable progress. Being heavily liquid, I'd rather not reinvent the wheel, thus the search for a reputable advisor, mind sharing info of this person guiding you please?
She's known as *Gertrude Margaret Quinto* One of the finest portfolio managers in the field. She's widely recognized; you should take a look at her work.
Thanks for the advice. The search for your coach was simple. I investigated her well before using her services. Considering her résumé, she appears competent.
Really, the video starts at 12:30
I ❤ the way you teach! Specifically, you break the tax laws down for easy assimilation. You also provide overviews and takeaways of the video. Thanks Karlton!
One of the best moves I ever made in my life. Filed taxes this year and was amazed. I’m hooked. Thank you KD. I looked at an in-depth older video of yours end of last year or beginning of this year about this same topic. And an older video on the tax savings on the different business structures. The laws of the universe and attraction are making my goals inevitable.
does looking for a property count towards the 750 hours needed to offset taxes on your w2/1099 before buying the rental property??
Thanks!
Game changing knowledge for me! Now I have to watch all the other videos.
Hey bud, your videos are money!!!!!🎉🎉 Thank you for all the value. Tell your team to keep up the good work for me. You guys are killing this space. Can't wait for the end of the month challenge. Stay blessed.
Could you please comment on this statement?
“Capital gains are not passive income; they are portfolio income. This distinction is essential for tax purposes because it affects how deductions like depreciation can be applied. ”
Thank you,
If you choose not to take depreciation on a rental, do you still have to pay it back if you end up selling the property?
2. For high w2 earner, do you still qualify for taking deductions such mortgage interest and depreciations on the rental income?
Great wealth of knowledge. Your explanation skills of this knowledge are on point. Bought an old home in MD for $235k, received 4 lots on one deed with their own tax base. I rebuilt the original home with $200k construction loan and $130k in credit cards. I lived on lot #2 until the rebuild was done and renovated lot #2 as well. Now, I rent lot #2 but it came as one of the gifted lots. I build a work space on the back side of the rebuild to work from. The other two lots are .5 per acre land. I am a self-employed person working from a dedicated space of my home. I did not know I could depreciate my work space (34.23 %) of home. 2021, rented a section of rebuild home (10%) to a friend after closing down my business for six months. trying to understand cost basis to apply depreciation to my home, business and how to file 3115 form for lot #2, I dropped depreciation 1.5 years I had no tenant??
When you go onto these websites like Zillow, ECT. I can not find the entire tax history report. I only see the property tax and tax assessment.
Hi, you’re so right; setting up the rental investment right - from a tax angle - at the beginning is key. Just subed!
Karlton, as I understand you, since I am an early retiree who owns rental property, I can claim active rental losses on other income such as pension, social security and the sale of other real estate? Plus, I use my spouse, who is a lawyer to manage the property as well as pay her a monthly legal retainer. Am I going in the right direction? Thanks.
I love this video
It’s crazy how many Tax pros don’t know the information he put out in this video.
Karlton, thank you for taking the time to make this video and share valuable information. It took me some additional research and study to fully comprehend the rule to the point of confidently sharing this with my clients and give them assurance that, if they meet the requirements, the losses could be legitimately claimed. Thanks again.
My client rents out his basement. He’s a travel nurse and outsourced the management. I couldn’t justify him writing off the rental losses. He’d have to be spending 15 hours a week all year to hit that 750 hours. He’s a travel nurse working overtime.
So if I sell the home in 5 years. And they do bonus depreciation recapture, do they just take back all the money I saved on taxes? Wouldn't that just be a wash?
Karlton- I learn a lot from your content . Thanks so much! Please keep dropping GEMs to the community.
WOW what an education. I’m sold. THANK YOU for your service. I had been wondering for years how to actually use real estate properly for offsetting taxes. Nobody had ever explained or even mentioned any of these topics to me. Wouldn’t have even known what to ask Google. Planning to do this immediately. Thank you!
Stellar presentation along with FACTS makes this a keeper!
Thank you for your video. However, what happens when the property is older than 27 years? Can’t use depression
Good question what happened ?
Thank you Karlton!! I am truly fan of your work. keep it going!
Awesome. Jammed-packed information. I actually stop all my multitasking to focus. Saved to research. Subscribed and liked
Amazing videos and I have always been a big fan.
Wondering if you can do a video on using non profits for write offs and does it provide W2 benefits?
Been studying the topic of using depreciation in real estate to offset taxes and I was thrown a curveball when I came across the term “real estate professional”. This video came right on time and as always, you do such a great job explaining. I do however, find it hard to believe that the “wealthy” are spending 750 hours a year in real estate or own majority of their real estate in short-term rentals… I could be wrong.
Glad I could help. Look forward to sharping your understanding during the Tax Free Wealth Event !
@@karltondennis@karltondennisofficial I love love your content. Can I qualify as a real estate professional status if I'm real estate agent?
@@karltondennis does looking for a property count towards the 750 hours needed to offset taxes on your w2/1099 before buying the rental property??
@@karltondennisI'm treasurer on a board of directors of a 400 plus townhome community. So I eat and breathe property management as
fulfilling my duty as an almost full time volunteer. Would this qualify me as a real estate professional? Bcuz that would be very helpful in my tax life. Great video!!
Someone finally made this video. Fantastic work
We do Airbnb(rent out 1 of our bedrooms. Been doing it for 2.5 yrs. and luv it). But what are all the tax write offs we can use when we do our taxes in Feb.?? Tytyty❤
Hey Karlton - if you have a spouse that doesn’t work, can they claim real estate professional status and then file jointly and use their real estate professional status to use passive losses to offset active income?
Yes! Definitely
To show time in the real estate operations. Can you just open a property management company, hire your own company to manage your business and be your own employee.
Lol ypu answered it in the video like a minute after I asked
This is literally the video that made me follow you… 💪🏽 really appreciate all this information. I look forward to implementing all the strategic tools to my real estate venture. Thanks
Absolutely amazing video! 🙌🏽 very thorough explanation of the different avenues to utilize this strategy. Fantastic job 👍🏽
Thank you KD amazing content! While researching about LLC for my 4 rental props your channel showed up. I’m hooked so much I’m learning here my CPA doesn’t even tell.
You are Awesome my friend. Period. Peace.
i tried this and now i am dealing with an IRS audit ... great work
call my office on monday. we would love to defend you against the IRS on this matter. 714-252-5822.
Depreciation is a real concern, the property is losing value year over and year. And at some point the owner will have to come up with a huge sum of money to bring the property back to its original value. Its a paper loss but its not a paper loss.
So essentially if it's not a short term rental, and youre just renting to a tenant for 12-13 month lease agreements, the only benefit to a rental would be the cash flow from the tenant and a person wouldnt be able to take advantage of any potential losses or depreciation? Was thinking about renting somewhere and using my primary residence as a rental, but seems like it may not be worth it?
Always spitting gems 💎🔥🤙🏼
Where part 2?
Hey, this is an awesome video!!! I really appreciate your style of teaching. I’m going digging in your channel after I finish this series…
Karlton I wanted to ask if you do tax returns ? Thanks for all your good information.
Yes. Link in description to book a call
Thank you so much for educating us !!! Great Job
Just bought a house for rental by students. It is going to be yearly leases. Each year a new lease. My wife works 20 hours a week, so she can be setup is Real Estate Professional Status? She is on a deed. - Subscribed.
great channel man. you have a new viewer. thanks for sharing your knowledge.
Thank you Karlton! I was beginning to look into selling one of my properties where I currently have long-term rentals. However, I am now reevaluating.
KD does the STR property have to be in the United States in order to take advantage of these strategies? Or can the property be in another country?
Needs to be US based to use the cost segregation strategy
One of the best explanations of this subject I’ve ever heard. Thanks!
Great video. I have owned a short term rental for about 2 years that have taken a loss each year; however I have been told my w2 income is too high to qualify for those losses. Is that accurate?
Started my business and bought a rental this year I’ll definitely need your help
Can I start a cost segregation study on a property I’ve already owned for several years (when the standard depreciation schedule has already been started)?
It is 20-30% of the building value on homes and apartments but 100% on shopping centers or business commercial buildings.
Great video. If I purchase a short term rental property, and I spend at least 100 hours, and it's more than anybody else, and I now have an active real estate business, can I now consider myself a RE professional and utilize depreciation losses from another investment as 'ordinary losses' to offset my W-2 and K-1 income? I'm currently (passively) invested in a couple shopping centers that are being remodeled and adding tenants to prepare for a sale next year. I want to be able to capture the depreciation (from the cost seg.) to offset OI. Thanks
Thanks. Would love to see a video discussing how the sale of a property might allow carryover PALs to offset W2 income.
I've seen a lot of different videos addressing these topics but yours is truly the best! Thank you sir you have a gift :)
Wow! I just came across your video, and I can say I learned so much about tax terminology and information. Thank you very much!
So if you buy land and develop it that requires time and resources do build plus it’s only land value so you can claim depreciation on new property? Does this new property then have to be a short term rental property to offset other rental income. And put all properties under one company a managing company? What makes that business a managing company besides managing the rents/landlord duties?
Yes, but how many weeks a year does the property have to be rented for? What if it is a seasonal property?
These videos are amazing.
Thank you for this video very helpful!! QUESTION! My tax professional is stating if I put my current rental property (which was my primary residence and I moved out of it to make it a rental) into an LLC and do a schedule C with him when filing I will be able to write off all of my depreciation and losses etc and deduct that from my W2? Is this correct or is he misinformed? He said the reason I cannot deduct it from my W2 currently is because it’s not in a LLC… just want others thoughts.
Never seen it explained any better than this 👍👍👍
Also, thank you so much for all this information. Learning a lot from you.
One thing I haven’t found much about is if your saving up with a friend and want to invest together how could that all work?!
If my wife stays at home and does all the research for the properties we are trying to buy would that account for the 750 hours?
thank you for this video. I’ve just been studying about this and hoping to have enough courage to start this type of invesment
Link to a video that connects the property management company while remaining within the guidelines of achieving the short term rental property depreciation realization? To rephrase, achieving the 100 hours materially participating but also pairing the property management company aspect?
So we inherited the paid off home next door and I work part time in my own cleaning painting business and husband works full time. So i have the time to invest and want to offset his w2 and my 1099. We dont want to short term. So how would I account for 750 hours?set up a management company? Going to watch that next.
Amazing content very detailed in explaining the loopholes for rentals.
This is a phenomenal video. It all finally makes send to me. I was perceiving this the wrong way.
so educational amazing way to explain fell i got years of experience in minute
Thank you. This was extremely informative.
Excellent work brother 👊 I’ve led multiple people through this same logic path. Blows their minds 🤯
The real KD!! What's good Coach
Could you do a video on how to actually fill out a Massachusetts state income tax return?
My Tax software does all of the work for me. This isn’t worth your time in my opinion. Tax filing should be outsourced
After the insurance is paid I might bring home $100-$200 per house every month. That is if everyone pays and nothing breaks.
Great video. Thanks
Question: If I qualify as a RE professional & have a short-term rental that I use personally from time to time is there a limit on how many days I may use it for personal use and still take a passive loss via depreciation on that property?
did you ever make the video on creating a management company for dealing with our personal rentals? Any recommendations on finding a cpa that does Cost Segregation study?
Does obtaining a real estate license qualify for IRS professional status hours?
Thank you so much! First real estate video I have seen that, not only explains the terms being thrown around but, the actual strategies and the rationale for them.
Where's part 2, long term rental
Bro great information, opened my eyes in soo many ways on why we need real estate
These videos are gold. Thanks mate!
Super knowledgeable on the info. Thank You for sharing
Can singles that make less than 150k take advantage of this tax code?
Also does the property have to be labeled a rental property or can it be a personal duplex
Your a wonderful teacher. Im all in
This was very informative video. Going to check out part 2
If you’re a W2 earner and your investment property is not making positive cash flow, can you write off your loss against the the W2 income? Is thete a way around this to be able to write off the loss annually?
Content is amazing love your channels!
Impressive presentation. Thank you for education!
This is an amazing video!! This is coming from a seasoned investor
How do you find out the Land Value vs Building Value? One of my homes burned down. I wonder what it worth now. I hate to ask a realstate agent as they just want to sell it for me. Blow up the real value to get me hooked into siging paper work with them. Then coming around telling to lower the price for real value.
Isnt this only the case if you make under 150k/year?
Hmmm I don't understand the locking and unlock explanation.I confused@ 20:52. Why is it locked ..
Only question always heard if you file loss to pay less taxes it hurts to show for banks as a good business to be good for a loan ? So is this a good way to declare loss but still get approved for bank loans
Owning property in another state seems unmanageable. I'm not flying to TX when the toilet is stopped. How do you manage the sorts?
Great information Karlton. Thank you for sharing this with us al.
Do condos/apartments typically have a higher building value vs land value?
Informative video. One thing I noticed missing was the cap on real estate losses. You are only allowed 25k in loss if you make under 100k w2 income. I’ve lost 20k in write offs 4 years straight. How can I get around this cap
You explained this so well ....