How to reduce income tax

Question

what are some legal ways to reduce my rental imcome? Can my partner/girlfriend claim the income and expenses?   Does her name need to be in the mortgage or deed?

Josh Sparks · Answer

I have good income as a PT and want to reduce my taxable income vs raising it. I helped my girlfriend buy a 4 unit and she makes significantly less than I do. The first 4 unit is all in her name, and the next one will need to be financed by me, just trying to figure out if I can finance but have her claim all the income somehow.

Chris Soignier · Answer

The best advice I can provide is to find/hire a good tax accountant who knows real estate well.    Don't focus on the cost, a good one can save you more than they bill.    I used to be hard-headed about being competent enough to do my own taxes w/ Turbo Tax, using the internet like you to research stuff.    Got myself in a bind w/ the IRS, hired a good CPA, and he's more than paid for himself ever since....plus I no longer have to do tax returns!

Jacob Sampson · Answer

I'm assuming you are taking advantage of depreciation?

In general, though I would verify with a professional, with an llc or sole prop. the income will flow through to the owners as earned income.  no different than your job.  Any owner/partner of either entity will split the income according to there % of ownership.

My partner and I have an LLC an we are 50/50.  Therefore, he takes 50% of profits as income and I do the same.

It would be helpful to know more about the your specific numbers?  Do you use an accountant/tax person?