Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
First a quote from the honorable judge Learned Hand.
"Anyone may arrange his affairs so that his taxes shall be as low as
possible; he is not bound to choose that pattern which best pays the
treasury. There is not even a patriotic duty to increase one's taxes.
Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands."
What are you doing to minimize/manage your taxes? Especially if some of your standard deductions and shelters are phased out because of a healthier income?
Yeah, I know, it's a boring tax question. I'll be more specific. Is depreciation an important factor in what you are looking to buy and hold? Are you looking for a lot of depreciation for tax protection?
I'd rather make the dollar and pay the tax than lower my returns as a percentage; however, there are various strategies that can be used.
Depreciation and cost segregation are great; however, you might want to consider the advantages of a non-profit to fund a pension for you, othe corporations, family partnerships, etc.
Agreed.
You would need to consider some form of retirement planning that involves pre-tax contributions. In addition, do you have the right kind of entity structure that minimizes the self employment taxes you pay on business income? There are several strategies available based on your specific situation
Re: depreciation, It really depends on your individual tax situation. Are you a real estate professional? Do you materially participate or actively participate in the rentals? Do you make under $100k/year?These are more questions determine if you would even benefit from depreciation due to the passive loss rules. You really should purchase based on the mechanics of the deal and not the tax benefits. Also remember that any depreciation that you take is recaptured when you sell