To be a successful business owner and investor, you have to be emotionally neutral to winning and losing. Winning and losing are just part of the game. Risk comes from not knowing what you are doing.
People dont understand that the prices of things are never going back down. This inflation is deeper than we think. Those buying groceries are well aware that the real inflation is much over 10%. The increments dont match our income, yet certain investors still earn over $365,000 in stocks and assets. Wish I could accomplish that.
Very possible! especially at this moment. Profits can be made in many different ways, but such intricate transactions should only be handled by seasoned market professionals.
Sounds interesting. I was planning to invest some few £ in some coins, stack them up and leave them for a few years, but seeing this changed my mindset. Thank you very much
My 401k lost everything it's gained since early 2019. Sigh, wouldn't mind looking into the person that guides you, I'd really love to grow my reserve seeing I should be retiring in 3years.
I’m in a situation where our cash flow is too high and the depreciation too low, where I need to really do a 1031 to raise my depreciation across 2 properties. But the cost is relatively high to sell. But “scared money don’t make money” so I’ll likely have to update the first property in order to move onto 2 in a 1031 situation.
I was in the same boat. Got some places in Florida that were much more expensive than the houses I was buying. So they will have much more depreciation to offset rental income.
YOU ARE AMAZING 🤩 Thank you sooooo much for caring enough about us to share your experience and wisdom. You are a 🎁 to us all. Do you have any resources, or other intelligent, responsible people that we should seek out in addition to listening to you?
Great info, as usual. A nice high-level overview. I would guess no need to worry about recapture unless not going to pass the home to heirs, but would it effect a 1031 exchange? Switching gears: Finding a syndication would be nice but I think many of the investors on RUclips learning aren't at the level they'd be accepted. Investors will need to grow to that level, and that's the 'awkward' stage. Basically just enough but not quite enough to level up. Many thanks for the excellent content.
It sort of affects a 1031 You have to 1031 into a property that has depreciable assets with a value at least equal to the depretiation you're carrying, or the deficit gets recaptured
Hi, Sharon, could you do a video where you talk about offsetting 401K (or IRA) ordinary income during retirement with activities like owning a business and the deductions that can come with it? Maybe I want to start a new business in retirement. Or owning a short term vacation home rental with the accelerated depreciation and cost segregation to offset having too much ordinary income coming out of a too big of a 401k (or IRA)? You don't have to talk about the mechanisms themselves. There's plenty of other RUclips out there on those two topics. Rather, could you talk about if it's even possible to use those mechanisms to offset ordinary income from a 401K (or IRA) being taxed during the retirement years? Everywhere else on RUclips they tell you to use the bucket strategy to massage tax tiers. I'm more interested learning about if you can avoid the higher tier ordinary income taxes from the withdrawals from a mega 401k (or IRA) and later RMD's and convert the would have been paid taxes into equity via depreciation losses in a short term vacation home rental (think of oceanside Maui), that eventually gets a step up in basis passed my heirs. Keep posting, great content.
Having bought real estate at the high's in the early 2000's, depreciation recapture for me is a bigger issue than capital gains. Would you do a video on that?
I ran some numbers for a hypothetical scenario where I'm invested in a RE fund, and couldn't get to taxes being zero. Am I missing something? Assume $100K invested, 7% cash-on-cash return (from another one of your videos), 39-year straight-line depreciation, and 80% of property (vs 20% land): (1) I'd get annual distributions of $7,000 (2) Depreciation deduction of $100K x 80% / 39 = $2,050 So deduction here is only ~30% of distribution. Of course it could be more in year 1 with Bonus depreciation, but that's a one-time thing if I understand it correctly. So how exactly do you get to ~0 in taxes? Or does this only apply to owning RE directly, and not via a fund?
To be a successful business owner and investor, you have to be emotionally neutral to winning and losing. Winning and losing are just part of the game. Risk comes from not knowing what you are doing.
People dont understand that the prices of things are never going back down. This inflation is deeper than we think. Those buying groceries are well aware that the real inflation is much over 10%. The increments dont match our income, yet certain investors still earn over $365,000 in stocks and assets. Wish I could accomplish that.
Very possible! especially at this moment. Profits can be made in many different ways, but such intricate transactions should only be handled by seasoned market professionals.
Finding yourself a good broker is as same as finding a good wife, which you go less stress, you get just enough with so much little effort at things
Sounds interesting. I was planning to invest some few £ in some coins, stack them up and leave them for a few years, but seeing this changed my mindset. Thank you very much
My 401k lost everything it's gained since early 2019. Sigh, wouldn't mind looking into the person that guides you, I'd really love to grow my reserve seeing I should be retiring in 3years.
I’m in a situation where our cash flow is too high and the depreciation too low, where I need to really do a 1031 to raise my depreciation across 2 properties. But the cost is relatively high to sell. But “scared money don’t make money” so I’ll likely have to update the first property in order to move onto 2 in a 1031 situation.
I was in the same boat. Got some places in Florida that were much more expensive than the houses I was buying. So they will have much more depreciation to offset rental income.
And as long as the rent pays the mortgages or slightly cash flow, the paper losses will help offset and lower tax liability.
YOU ARE AMAZING 🤩
Thank you sooooo much for caring enough about us to share your experience and wisdom.
You are a 🎁 to us all.
Do you have any resources, or other intelligent, responsible people that we should seek out in addition to listening to you?
Great info, as usual. A nice high-level overview. I would guess no need to worry about recapture unless not going to pass the home to heirs, but would it effect a 1031 exchange? Switching gears: Finding a syndication would be nice but I think many of the investors on RUclips learning aren't at the level they'd be accepted. Investors will need to grow to that level, and that's the 'awkward' stage. Basically just enough but not quite enough to level up. Many thanks for the excellent content.
It sort of affects a 1031
You have to 1031 into a property that has depreciable assets with a value at least equal to the depretiation you're carrying, or the deficit gets recaptured
Hi, Sharon, could you do a video where you talk about offsetting 401K (or IRA) ordinary income during retirement with activities like owning a business and the deductions that can come with it? Maybe I want to start a new business in retirement.
Or owning a short term vacation home rental with the accelerated depreciation and cost segregation to offset having too much ordinary income coming out of a too big of a 401k (or IRA)?
You don't have to talk about the mechanisms themselves. There's plenty of other RUclips out there on those two topics. Rather, could you talk about if it's even possible to use those mechanisms to offset ordinary income from a 401K (or IRA) being taxed during the retirement years?
Everywhere else on RUclips they tell you to use the bucket strategy to massage tax tiers. I'm more interested learning about if you can avoid the higher tier ordinary income taxes from the withdrawals from a mega 401k (or IRA) and later RMD's and convert the would have been paid taxes into equity via depreciation losses in a short term vacation home rental (think of oceanside Maui), that eventually gets a step up in basis passed my heirs.
Keep posting, great content.
thank you
Having bought real estate at the high's in the early 2000's, depreciation recapture for me is a bigger issue than capital gains. Would you do a video on that?
Never sell and you’ll never have depreciation recapture. If you need cash out, cash out refinance or pull a line of credit from the property.
Good morning coach!!
I ran some numbers for a hypothetical scenario where I'm invested in a RE fund, and couldn't get to taxes being zero. Am I missing something?
Assume $100K invested, 7% cash-on-cash return (from another one of your videos), 39-year straight-line depreciation, and 80% of property (vs 20% land):
(1) I'd get annual distributions of $7,000
(2) Depreciation deduction of $100K x 80% / 39 = $2,050
So deduction here is only ~30% of distribution.
Of course it could be more in year 1 with Bonus depreciation, but that's a one-time thing if I understand it correctly.
So how exactly do you get to ~0 in taxes? Or does this only apply to owning RE directly, and not via a fund?