Utilizing property to reduce taxable income

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Hello and Good evening BP Brothers & Sisters.


Tonight I wanted to post a question I have been thinking a lot about lately. "How could an investor best utilize property to lower taxable income"?

We currently own two properties we had the good fortune of purchasing with VA loans that started as primary residences and became rentals for one reason or another. I am semi active in acquisition side of wholesale aside from having a traditional real estate team. We are working on buying additional properties for buy and hold.

-Could I accelerate depreciation on multiple properties to reduce taxable income if the plan is buy and hold. If we did this and needed/decided to sell and utilized a 1041 exchange could we roll the tax implications forward while still utilizing accelerated depreciation without having the implications of accelerated depreciation? Maybe another way of doing this? 

Just trying to brain storm some ideas, any suggestions would be warmly welcomed. : )

Cheers 

Lucas

Originally posted by @Lucas Rowell :

Hello and Good evening BP Brothers & Sisters.


Tonight I wanted to post a question I have been thinking a lot about lately. "How could an investor best utilize property to lower taxable income"?

We currently own two properties we had the good fortune of purchasing with VA loans that started as primary residences and became rentals for one reason or another. I am semi active in acquisition side of wholesale aside from having a traditional real estate team. We are working on buying additional properties for buy and hold.

-Could I accelerate depreciation on multiple properties to reduce taxable income if the plan is buy and hold. If we did this and needed/decided to sell and utilized a 1041 exchange could we roll the tax implications forward while still utilizing accelerated depreciation without having the implications of accelerated depreciation? Maybe another way of doing this? 

Just trying to brain storm some ideas, any suggestions would be warmly welcomed. : )

Cheers 

Lucas

Yes you can without limitations if you are a full time real estate professional.  

If you are not, up to 25k of net rental losses from is deductible only if your AGI is below 100k. The 25k deduction completely phases out when you reach 150k AGI.

Also, you cannot accelerate the property it self. The real estate asset is not a qualified property for 100% bonus depreciation or section 179 election.

Yes when you 1031 exchange, you tax attributes carries forward.