Deductions (Write offs) Against W-2 Income

[Brian Shelton]

I have primarily W-2 income. Most of my passive income is offset with depreciation. I’m trying to find an investment that allows me a deduction against my W-2 income. Other than Oil and Gas investments (IDC), it is very hard to find anything. Looking for ideas. FYI, i do not qualify as a RESP nor does my wife. Thank you!

[Eamonn McElroy]

You're having a hard time finding strategy because, in general, you cannot take a loss for tax purposes unless you suffer an economic loss or you're moving economic gain to the future with depreciation deferral.

There's no magic bullet.  The passive activity loss rules were implemented to crack down on what you want to do.  What you need is an advisor who can take the holistic approach with planning. e.g. entity structuring, transaction structuring, utilizing tax deferred accounts, and utilizing tax credits effectively.

If you are and your wife are both W-2 employees, you're going to find it incredibly difficult to move the needle. Tax deferred accounts and maybe purchase of tax credits at a discount are your best bet. That along with focusing on the highest IRR investments until you can walk away from the W-2. Taxes are just one component of IRR.