What structure for a couple with high incomes ?

[Brandon Baker]

Hello, I have a quick question. My wife and I are wanting to start investing in rental properties. We both have high income jobs. She has two kids and claims the house and head of household because of her kids. I have zero tax deductions currently. We keep seperate finances. How should we start out? Should we set up two seperate businesses? Should we invest together? Any particular strategy give us more tax advantages?

[Linda Weygant]

Originally posted by @Brandon Baker:

Hello, I have a quick question. My wife and I are wanting to start investing in rental properties. We both have high income jobs. She has two kids and claims the house and head of household because of her kids. I have zero tax deductions currently. We keep seperate finances. How should we start out? Should we set up two seperate businesses? Should we invest together? Any particular strategy give us more tax advantages?

 If you are legally married, your wife is not permitted the Head of Household Status.  Your choices are Married Filing Joint or Married Filing Separate.

Once you fix that, then you'll need to figure out whether your rentals will have net profits after depreciation or net losses (or a mixture).  Based on that, you'll need to figure out a plan for working with the Passive Loss Rules.