Real estate n00b here. I've heard you can deduct income tax with real estate. Just rent your property under an LLC taxed like an S Corp, where you combine your personal income. Say I make 300k and pay 120k in tax normally. Does it mean I can deduct the whole 300k and say pay 0 tax? By using Real Estate Magic. TC 300k YoE 5 #mortgage #housing #faang #google #amazon #microsoft #meta
If it’s long term rental it’s a passive activity and passive losses cannot offset active income (your W2)
You cannot mix W2 and rental income
That's not true ;)
It is both income and can be taxed
No
U can write off expenses and there is a cap on losses
My understanding is you can write off positive cash flow from the property due to maintenance, mortgage interest, and depreciation. You get depreciation for most of the duration of a 30 year mortgage. After that, you either pay more taxes on the earnings, or 1031 it into another property rinse and repeat.
20 years of income property experience here: get an accountant who understands real estate. You can deduct losses from passive real estate against active w2 income but you or your spouse must be real estate professional per irs.
I think you have to work more then half the year as a real estate professional to be able to do this (pretty much full time).
I think the number is 750 hours of work to be considered a real estate professional (~14 hrs/week)
Don’t mess with Uncle Sam