How to Use Real Estate to Avoid W2 Taxes

JOIN THE TAX-FREE WEALTH CHALLENGE NOW! OCTOBER 14-18, 2024!

Learn the rich's tax secrets with my new book! Click the link below
Taking the Next Step:

My Tax Strategy Programs:
#taxes #taxfreeliving #taxexpert #taxreduction #llc

Check out these links Below!


Starting a new business? Tax expert Karlton Dennis is here to show you the Top 5 things YOU should be most focusing on as you go through the steps of starting your business.

⚠️#TaxDeductions #Taxes #llc ⚠️

Recommended Video For You

Here's are some tax deduction tips that can help you save more on paying taxes.
In this video we will discus: How to Use Real Estate to Avoid W2 Taxes
- Real Estate Professional Status
- Depreciation
- Short-term rental real estate
- Rental property tax deductions

Watch this video to avoid overpaying to Uncle Sam and to get educated on how to leverage the tax code!

*Disclaimer: I am not a financial advisor nor am I an attorney. This information is for entertainment purposes only. It is highly recommended that you speak with a tax professional or tax attorney before performing any of the strategies mentioned in this video. Thank you.

[ChristopherAbelman]

I appreciate the existence of tax breaks but navigating loopholes feels dangerous. How can I ensure I'm taking advantage of tax-advantaged investment structures without potentially encountering unintended consequences?

[MarkFisher]

I’ve done research over the past year so I already knew this but the way you explained it made it so much easier and would have saved me countless hours if I saw this first. Keep crushing it brother!

[svuvmdv]

I am 46 and working for 22 years now. This is by far the most useful video for tax saving on YouTube, period.

[jakobdeiner]

I am only 17 and turn 18 in a few weeks. Have learned so much from you and can't wait to start using all the information you have taught me. In the future I plan on being one of your clients.

[paulmorrow]

The “excess business loss” rules in IRC 461(l) were amended by the CARES Act in 2020. These rules prevent you from using business losses from pass through entities (partnerships, s-corps, LLC’s, sole proprietors. Etc.) to offset W-2 income. It does not matter how active you are. If you exceed the income threshold you cannot offset W-2 income with business losses.

[robertt]

I have a very experienced CPA, have for years. I showed her this video. And she smiled. The only question that came out of her mouth was, a $200, 000 loss? When would that happen? you’re certainly not going to consecutively have a loss on a house of $200, 000 every year. So is the game to stay under that seven days occupancy and make the house a failure?. I don’t think you define clear enough if the rental property should be successful, or it should be a complete failure for the tax write off. Because if you’re running a normal even mediocre short-term rental you’re not going to have a $200, 000 loss. So is the goal to buy a property not to make money and only to use for a tax write off?
I think it’s important you tell people this isn’t a situation for everyone. I know you have another videos but in this video and others I would make sure people understand that you just don’t go out and buy a property and automatically get a right off. It isn’t that easy. You have to work at that house to be a failure if that is what you’re trying to accomplish. And then the question becomes what am I really saving if the house is a failure? like the concept understand the legality‘s and the tax, but I’m completely missing the real world example here.

[paulmorrow]

I spent 10 years in the consulting practice of a large accounting firm. I am not saying this video is wrong, but one BIG thing this video does not mention is that the depreciation taken lowers your basis in the asset. When you sell the asset you now have a higher gain and pay more taxes. There is something called 1250 recapture which taxes that portion of the sale at higher rates than normal capital gains. You CAN benefit from the rate arbitrage between ordinary losses and 1250 gains, but because depreciation was taken more gain will be recognized later and at a higher rate.

[radumesesan]

such a legend. man the tax code was invented for us to utilize not fear. thank you for doing your research and delivering to us. the value you bring with every video is enormous. Thank you Karlton

[joejohnson]

There's limitations to all of this tho. Your tenants have to be less than 7 days on average (essentially must be airbnb or the like). I'd also assume that you can only depreciate an item in your home once. Meaning if you depreciate over a short number of years, after those years have passed, you can no longer claim a loss every year. How many airbnb rental properties truly have 200k per year of itemized depreciation as in the example? This video is a good concept but only applies to a small subset of people and most likely does not generate as large of a tax write off as the example implies

[Zyas]

I’ve listened to a lot of financial advice on YouTube. This is the best. No BS, no repackaging obvious facts as insightful. This is just great stuff and 100% useful and not obvious.

[shugahill]

Karlton, this video was amazing. This is exactly the kind of information I have been looking for. Everyone needs to listening to this.

[TheBusinessGuy]

Very well done, Karlton. You take boring (but important) topic and make it fun to watch. BRAVO.

[rileywardrop]

Karlton I’m a cost segregation study provider and this is the best video I’ve seen that accurately defines cost seg while also showing the tax benefits to be found in real estate.

[metakmoto]

I love how hyped Karlton gets about his own knowledge 👏 awesome!

[alexsteven.m]

Some economists have projected that both the U.S. and parts of Europe could slip into a recession for a portion of 2023. A global recession, defined as a contraction in annual global per capita income, is more rare because China and emerging markets often grow faster than more developed economies. Essentially the world economy is considered to be in recession if economic growth falls behind population growth.

[MK-tfzb]

New to real estate investing and I can't get enough of this guy. Keeps it simple and explains things well. Awesome service you are doing!

[uticany]

Exact video/training I was looking for, for a long time. I learned more in this one video than all the videos I watched in the last 6 months. Thank You

[tkpatton]

I am very much "getting" this and am super stoked that I stumbled on your mistakes with LLC's video with impeccable timing. Thanks for making this all available!❤

[NotAntoineTran]

Even if you have a short term rental, you have to prove material participation, otherwise, it would still be considered a passive activity. The rules for material participation that you mentioned were for qualifying as a real estate professional.

Listed below are the test for material participation. You would need to satisfy 1 of the 7.

1) The individual participates in the activity for more than 500 hours during the year.
2) The individual’s participation in the activity for the taxable year constitutes substantially all of the participation in such activity of all individuals (including individuals who are not owners of interests in the activity) for such year.
3) The individual participates in the activity for more than 100 hours during the taxable year, and such an individual’s participation in the activity for the taxable year is not less than the participation in the activity of any other individual (including individuals who are not owners of interests in the activity) for such year.
4) The activity is a significant participation activity for the taxable year, and the individual’s aggregate participation in all significant participation activities during such year exceeds 500 hours.
5) The individual materially participated in the activity for any five taxable years (whether or not consecutive) during the ten taxable years that immediately precede the taxable year
6) The activity is a personal service activity, and the individual materially participated in the activity for any three taxable years (whether or not consecutive) preceding the taxable year.
7) Based on all of the facts and circumstances, the individual participates in the activity on a regular, continuous, and substantial basis during such a year.

Please don't take advice from the internet and consult your tax advisor.

[jasminejohnson]

This was everything. I even laughed out loud a few times when you dropped major gems. I am soo thankful for this. I feel like I'm understanding a foreign language. Great job!