The real beauty of real estate is that you can benefit from appreciation while also using depreciation to reduce your taxable income.Other powerful concepts many investors miss include strategically timing capital gains to be offset, leveraging 1031 exchanges, and using creative financing strategies to keep your portfolio growing.And like Janet mentioned, it really depends on several moving parts, your other income sources, where you are in your investment journey, and what other investments or businesses you have.

You might also want to consider do any of these things force you to have to file another federal tax schedule.

If this is hundreds of thousands in taxable gains and you like the house it might be worth moving back in if you do qualify for 75% tax free.

When the property is eventually sold, the depreciation recapture rules apply — meaning the previously accelerated depreciation will reduce your property’s tax basis and may result in additional taxable gain upon sale.

Any reduction in debt or cash received may be treated as a taxable boot, resulting in potential tax liabilities.

You've got some strong cash flow in those properties and I love the fact that you're looking to leverage one of them to grow.From a tax perspective, a cash-out refinance doesn’t create a taxable event since you’re borrowing against equity, not selling.

Quote from @Chris Seveney: Quote from @Doug Smith: The Federal Reserve lowered the Federal Funds Rate by 1/4%, so why did mortgage rates rise?

This means a portion of the previously taken depreciation will be subject to taxation, effectively lowering your adjusted basis in the property and potentially increasing your taxable gain at the time of sale.

Treasury market is seeing renewed volatility as the 10-year yield has climbed back above 4.1%, reflecting persistent uncertainty and shifting expectations around the Federal Reserve’s next moves.

That pushes large deductions into early years, lowers taxable income, boosts cash flow, and strengthens your hold strategy.Risks & What To WatchDIY studies or unqualified firms: If the cost segregation report isn’t solid, audit risk goes up.