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Ryan Lowe's profile image
Ryan Lowe's profile image
Ryan Lowe
  • from West Palm Beach, FL
  • Member since Nov 26, 2023

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Ryan Lowe's profile image
Ryan Lowe's profile image
Ryan Lowe
  • from West Palm Beach, FL
  • Member since Nov 26, 2023
Ryan Lowe
  • West Palm Beach, FL
6
Votes |
8
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Tax, SDIRAs & Cost Segregation

Tax Strategies for High Income Professional

Ryan Lowe
  • West Palm Beach, FL
Posted

Hi - I am a new investor starting to invest in long term rental properties. I am a high income W-2 earner based in NYC. What tax strategies do folks recommend? This will be a passive investment. 

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Basit Siddiqi's profile image
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Basit Siddiqi
  • Accountant
  • from New York, NY
  • Member since Sep 27, 2015

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Basit Siddiqi
  • Accountant
  • from New York, NY
  • Member since Sep 27, 2015
Basit Siddiqi
  • Accountant
  • New York, NY
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Basit Siddiqi
  • Accountant
  • New York, NY
Replied
Quote from @Account Closed:
Quote from @Basit Siddiqi:

Real estate ownership is good for high net worth individuals in general.

Cash-flow will generally not be taxed when you factor in depreciation.
If you are a high net worth individual, your tax rate is likely around 45%(35% Federal and 10% for NY/NYC)

Therefore, $1,000 of cash flow is $1,000 after tax
On the otherside, $1,000 of interest income is likely around $550 after taxes.

Best of luck

@Basit Siddiqi: What happens when money from an SDIRA or 401(k) are used to lend for a flip and that money is lost? Is it a tax write off or is it penalized?

That amount that is lost will not be taken out as a distribution in the future, so it wouldn't be considered income.
There is no loss for decrease in value in a retirement account.

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