How to pay zero taxes while owning a business and real estate?

Question

I get the tax code is a series of incentives or penalties depending on how one structures their financial house.

Now if I own a business and invest in real estate, how can I effectively pay zero in taxes?

If I’m creating many jobs and creating housing for people, given an example, how can I pay little to no taxes?

Any real world example out there?

Greg Scott · Answer

Lingo:

Reducing taxes is not like seeing a unicorn -- a rare and magical event. This is like seeing a tree. It happens all the time, every day.

Take a simple example, a $120K rental house (land is worth $20K, the house $100K). Let's say it cash flows $300 per month (net of everything) which would be fairly typical. At the end of the year you have put in you pocket $3600. When you file taxes, you get to deduct $3636 of depreciation so according to the IRS that property lost you $36. How much income tax do you pay on losing $36?

Bill Goodland · Answer

I would recommend checking out Tom Wheelwright's book "Tax Free Wealth". He goes into a ton of strategies to limit and possibily eliminate your tax burden. Also, @Brandon Hall is a CPA that provides a ton of value on the forums that puts out good content if you want to reach out to his firm on how to reach your goals from a tax planning perspective. Best of luck!

Basit Siddiqi · Answer

@Lingo LinThis is a good question for your accountant.Maybe you shouldn't structure it as how can you pay zero taxes but should be like "how can I pay less taxes".It really depends on many factors including how well your business is doing, can it be combined with the real estate business, are you alreadying putting money into retirement accounts, are you accelerating your depreciation, etc.

How to pay zero taxes while owning a business and real estate?

How to pay zero taxes while owning a business and real estate?

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