How do rich pay zero taxes legally?

[Mary Jay]

Hi guys,

So I hear often (Robert Kiyosaki, Trump, other rich etc) pay zero taxes legally.

Lets say Kiyosaki's business "Rich Dad, poor dad, educational LLC" made 100K.

The same LLC went and bought a rental house for 100K.

Since all the money were spent  now  the tax liability is zero?

[Bill B.]

When you buy a rental property for $100k  you didn’t “spend” the $100k, you invested it, that’s not the deduction. (If you bought $100k in Tesla stock, you don’t get to take that off your taxes.)

Imagine you buy $100k property and rent it for $1,000/mo. You have $12k in income. Minus $600 mortgage payment ($100 principle, $500 interest.) x 12 - $7,200, $1000 for insurance, $1000 for property taxes, $1,000 property management. That’s $10,200, so you put $1,800 in your pocket and made another $1,200 in loan paydown. You made $3,000 profit. Then you get to deduct $3,636 in depreciation. Your taxable income is minus $636.

Now apply that to a $500k house, or a $100 million apartment complex. All of this is before you deduct your cpa, vehicle, cellphone, and a collection of other things “regular people” have to pay for after they pay taxes. You’re taking them off your taxes. They are part of your business. 

Don’t forget your first $11k as a single person is tax free also.