Tax Benefits with Rental Depreciation 🏡💰

Learn how this strategy wipes out your ordinary income and unlock the secret to financial freedom by paying ZERO taxes! 🤑

“But how does it work?”. The answer is with the incredible power of depreciation, a concept created by the IRS. Each year, the IRS will reward me with an insane tax benefit of $20,900 based solely on this property alone 😳

But here’s the truly mind-blowing part: The IRS allows you to claim seven of these benefits upfront during your first year of ownership which adds up to an astounding $146,000 in tax benefits right from the start! 🤯

[clearvaluetax]

This popped up on my feed. I am a CPA and this is COMPLETELY WRONG on so many of his points. Did not take into consideration land is not depreciable. There is no 7 year front-loading (audit written all over it). And you have to qualify to offset against ordinary income as a full-time real estate professional. Not to mention depreciation recapture rules.

[xalian]

You in court: “As my own legal representative, I submit this Reels clip as evidence A that I am innocent.”

[shannonlwalton]

You can only depreciate what the actual house is worth. Not the land. If you bought this property for $575K you have to back out what the land is worth before calculating depreciation.

[IsraelDFender]

I haven’t paid taxes in 25 years and it’s so simple. Start an LLC, then everything is a write-off. Your LLC “loses” money for 2 years (IRS allows 2 years of losses). Then you close it and open another one, then rinse and repeat…you’re welcome…good luck 😬

[HolyShit]

As a tax accountant, this guy is totally wrong!!!!

[rustymason]

I've noticed that classes over how to make money in real estate become really popular right before the bottom of the market drops out.

[rons]

Listen to this guy and get audited every year

[hieuusa]

IRS will Recapture depreciation when that house gets sell

[MegaJuniorJones]

Why do the amateur real estate kids try to explain tax strategies ? Leave it to the CPA’s

[Degengeo]

Hey Pace! HUUUGE FAN! Love your new book full of valuable information $$$ Will you please let me know if the bonus depreciation phasing out affects the 7year accelerated depreciation strategy that you utilize? Thanks in advance !

[sebastienbolduc]

It's always way more complicated than how these gurus explain it. This is a common practice for those who own industrial and/or commercial real estate. There's a reason why you see industrial and commercial buildings that are abandoned for years. In certain cases a municipality can force the owners of those estates to tear down the building and/or force them to sell the property. It's rare but can happen.

[jaredhall]

Passive vs active snd where are you getting 7 years. MAcc degree and own a tax firm. Reporting this post. It’s misleading in many ways. Plus depreciation has to be recaptured and passive losses have limitations. Learn tax if your going to explain tax on social media.

[CPATuttle]

You have to pay back depreciation when you sell the property

[cybrainx]

Also talk about Depreciation Recapture..instead of just misleading people

[stkyrce]

Understand this and you will be ok. You can not beat the irs. You can play with them, but you can not beat them.

[Corkfish]

Don't forget that depreciation recapture is ordinary income

[samidkhan]

Land value is not depreciated, only the structure value is over 27.5 yrs.

[falconalley]

Simply said: you benefit from the depreciation and IRS loses; you sell the property and the IRS benefit through capital gain tax, you lose.

[MgtowRubicon]

The IRS only allows depreciation on the improved property value, not the land value. Subtract the land value from the total $575K purchase price, then calculate the 27.5 years depreciation.

[cornpop]

You have to recapture at capital gains rate when you sell, it works great until you sell.if the house actually appreciates over time(which it will), after the 27.5 years when it's fully depreciated, you're taxed on the whole selling price. It's the logic of the tax deferred IRA, hopefully you'll be in a lower tax bracket in the future. Unfortunately if you're an aggressive investor, you will be in the highest tax bracket when you retire.