How to Use Real Estate to Avoid W2 Taxes

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Here's are some tax deduction tips that can help you save more on paying taxes.
In this video we will discus: How to Use Real Estate to Avoid W2 Taxes
- Real Estate Professional Status
- Depreciation
- Short-term rental real estate
- Rental property tax deductions
Watch this video to avoid overpaying to Uncle Sam and to get educated on how to leverage the tax code!
*Disclaimer: I am not a financial advisor nor am I an attorney. This information is for entertainment purposes only. It is highly recommended that you speak with a tax professional or tax attorney before performing any of the strategies mentioned in this video. Thank you.

Пікірлер: 866

@svuvmdv4608 10 ай бұрын

I am 46 and working for 22 years now. This is by far the most useful video for tax saving on KZfaq, period.

@MarkFisher88 2 жыл бұрын

I’ve done research over the past year so I already knew this but the way you explained it made it so much easier and would have saved me countless hours if I saw this first. Keep crushing it brother!

@TheBusinessGuy 2 жыл бұрын

Very well done, Karlton. You take boring (but important) topic and make it fun to watch. BRAVO.

@tarast4456 Жыл бұрын

agree

@YourPOP 2 жыл бұрын

This is phenomenal!

@Dm001681 Жыл бұрын

That was a fantastic video! You broke it all down in a way that was super easy to follow, thank you!

@radumesesan987 2 жыл бұрын

such a legend. man the tax code was invented for us to utilize not fear. thank you for doing your research and delivering to us. the value you bring with every video is enormous. Thank you Karlton

@tkpatton1185 Жыл бұрын

I am very much "getting" this and am super stoked that I stumbled on your mistakes with LLC's video with impeccable timing. Thanks for making this all available!❤

@shugahill97 2 жыл бұрын

Karlton, this video was amazing. This is exactly the kind of information I have been looking for. Everyone needs to listening to this.

@holylabs Жыл бұрын

You have a gift for teaching. I’ve watched many other videos but you know how to connect everything in a way its much simpler to understand. Glad i found you. Thanks

@user-ef9si8ob2t Жыл бұрын

Thanks for your comment ⬆️ Reach out to me for consultation and more tips on how to build your finances ✉️,

@paulmorrow8372 Жыл бұрын

The “excess business loss” rules in IRC 461(l) were amended by the CARES Act in 2020. These rules prevent you from using business losses from pass through entities (partnerships, s-corps, LLC’s, sole proprietors. Etc.) to offset W-2 income. It does not matter how active you are. If you exceed the income threshold you cannot offset W-2 income with business losses.

@zakshuman8450 Жыл бұрын

Real estate professional status does help here

@paulmorrow8372 Жыл бұрын

@@zakshuman8450 IRC 461(l)(6) says that the excess business loss rules shall be applied after the limitations of IRC 469. IRC 469 is where the passive loss rules are codified and includes the “real estate professional rules”. The excess business loss rules are generally agnostic to the income type. The only exclusion to the excess business loss rules I know of is certain farming income/losses for certain years. For a single taxpayer the most business losses you can uses in a year is $250k (plus a little for inflation). So if you have a 500k W-2 and a real estate or other business loss of 500k, you would still owe tax on 250k. This is the w-2 income minus the maximum business loss (250k for single for 500k for married filing jointly). Any excess loss is carried forward as a net operating loss which has other limitations in subsequent years.

@saintfuego1822 Жыл бұрын

@@paulmorrow8372 but this only applies to those owing over $250k on W2 taxes correct? If so everyone under that threshold should still be able to do what the guy in the video is explaining.

@chrisbrooks4885 Жыл бұрын

WELL ACTUALLY ERASING 250K OF YOUR W2 INCOME NOT 250K OF TAXES, ALL DUE TO THE BUSINESS LOSSES GAME. BUT WHAT THIS GUY IN THE COMMENTS IS SAYING REALLY HAS NO REAL RELEVANCE WITH 99% OF THE POPULATION. THIS 250K LIMIT I’VE NEVER EVEN HEARD OF IN MY 7YRS OF DOING THIS, SO I HAVE TO LOOK INTO THAT TO SEE IF ITS BOGUS OR NOT. NOW EVEN IF IT WERE TO BE TRUE THAT YOU COULD ONLY WRITE-OFF $250K OF W2 INCOME FROM BUSINESS LOSES, THAT’S NOT INCLUDING THE OTHER WRITE-OFF’S THAT’S NON BUSINESS RELATED. YOU CAN VERY WELL WRITE-OFF ANOTHER $100K IN NON-BUSINESS REALTED WRITE-OFF.’S AGAINST YOUR W2 INCOME. AND WIPE OUT $350K OF W2 INCOME. THEN YOU COULD START AGAIN WITH YET A 2ND SEPERATE BUSINESS WITH WRITE-OFF’S. AND ON AND ON AND ON…. THE THING IS YOUR ALSO NOT PAYING ANY TAXES ON THE BUSINESS INCOME IN ADDITION TO THE W2 INCOME. AND EVEN IF YOU DO WIND UP PAYING ANY TAXES ON THE W2 INCOME, THE OVERALL TAX SAVINGS WOULD BE ASTRONOMICAL IN COMPARISON TO THE NONSENSE TAX THAT YOU’D PAY.

@waqashaleem9886 11 ай бұрын

Can we schedule a 1x1 meeting ?

@MK-tf8zb Жыл бұрын

New to real estate investing and I can't get enough of this guy. Keeps it simple and explains things well. Awesome service you are doing!

@ramys642 2 жыл бұрын

You explain this so well! Greatly appreciate it.

@bencoughanour1832 2 жыл бұрын

This was a terrific video to bring together so many pieces! I used to send clients 5 different KZfaq videos to explain what you have in this one clip. Thank you.

@chrismonserrate 7 ай бұрын

The only video on you tube that breaks this down so plainly and decisively. Thank you!!

@uticany1 5 ай бұрын

Exact video/training I was looking for, for a long time. I learned more in this one video than all the videos I watched in the last 6 months. Thank You

@camillejennings4533 Жыл бұрын

I love your channel. I learn sooo much. You break things down so well. Thank You!

@paulmorrow8372 Жыл бұрын

I spent 10 years in the consulting practice of a large accounting firm. I am not saying this video is wrong, but one BIG thing this video does not mention is that the depreciation taken lowers your basis in the asset. When you sell the asset you now have a higher gain and pay more taxes. There is something called 1250 recapture which taxes that portion of the sale at higher rates than normal capital gains. You CAN benefit from the rate arbitrage between ordinary losses and 1250 gains, but because depreciation was taken more gain will be recognized later and at a higher rate.

@samuelhartzog7209 Жыл бұрын

Agreed but that's when you need to get into 1031's, stepped up basis, Deferred Sales Trusts, Delaware Statutory Trusts, Spendthrift Trusts etc

@Matt-em1ig 4 ай бұрын

@@samuelhartzog7209 and then you might avoid taxes, but spend a mountain of money on an army of attorneys and title companies to draft and perform all of this. And 1031 doesn’t eliminate anything, just kicks the can a little farther down the road.

@simplescents3309 Ай бұрын

@@samuelhartzog7209can I hire u

@TravelsoFun 6 ай бұрын

You are the best! I love how you explain things. I just discovered your channel about a week ago and I’ve been binging on your videos. I love this one, especially. But I love them all actually. ❤❤❤❤❤❤❤❤❤

@karlabruce2871 Жыл бұрын

Straight to the point, great video!

@nsharma99 2 жыл бұрын

Dude, thank you so much! You’ve got a supporter for life!

@jakobdeiner6554 2 жыл бұрын

I am only 17 and turn 18 in a few weeks. Have learned so much from you and can't wait to start using all the information you have taught me. In the future I plan on being one of your clients.

@kashfortheking Жыл бұрын

Good luck youngster. I wish you much success in life with your rentals and your businesses.

@KayakDIY Жыл бұрын

Buy a duplex, triplex, etc as your first home. House hack. Live in one side and rent out others. This will allow you to save money for another property. Rinse repeat. Wish I did it long time ago.

@Anonyme67 Жыл бұрын

@@KayakDIY bad advice. Duplex comes with a lot of headache with maintenance and tenants especially if they don’t like each others. Single homes in good neighborhoods is the best. Don’t ever invest in the hood. You can also buy distressed homes and fix them ( but if you don’t know what you are doing contractors might still money from you). I now buy ready to use and do minor works.

@Angelhunterthegoddess Жыл бұрын

Learn the tax systems and not just be a client let him teach what you’re not gonna ever have a chance to learn in school.

@KayakDIY Жыл бұрын

@@Anonyme67 wrong

@nitenitenurse713 Жыл бұрын

Just stumbled upon your video and you explained everything in such detail and simplified for even me (not a math whiz or investment whiz)! Thank you! Thank you! Thank you! I liked and will be following you to learn more! Sharing with my teens so they can have a head start and do more with their money than I ever did! GOD bless you mightily! ❤❤❤❤

@metakmoto 2 жыл бұрын

I love how hyped Karlton gets about his own knowledge 👏 awesome!

@EMB-tl6mi 2 жыл бұрын

Omg! Where have you been my entire life? I just saw this video and looking forward to seeing the rest, I'm already loving you. Great, awesome content!!!

@karltondennis 2 жыл бұрын

Thank you! I look forward to seeing you on the challenge www.thetaxfreewealthchallenge.com

@tejaswinigaikwad7356 Жыл бұрын

Very informational video, can't thank u enough for sharing the info. The way you explained it made it so much easier to understand all jargon. keep it up.

@doordiariesre Жыл бұрын

I loved the way you presented this information - the graphics and visuals really helped me understand the topic better.

@Ironmon007 Жыл бұрын

Karlton, great content! Keep them coming Sir...

@jjvdz Жыл бұрын

Thank you for your content man. Such Valuable Information

@LilahJ83 2 жыл бұрын

I love this channel. I’ve learned so much! Thank you.

@juliancanizales5817 2 жыл бұрын

You are literally blow mine mind right now Karlton. I have been thinking about opening a business, now I have a clearer view on what to do thanks to you...

@jasminejohnson4707 Жыл бұрын

This was everything. I even laughed out loud a few times when you dropped major gems. I am soo thankful for this. I feel like I'm understanding a foreign language. Great job!

@carolinatardelli4932 Жыл бұрын

Karlton, you are just amazing and this is the most valuable video I have seen on KZfaq! Thank you!

@ibeballintv8228 Жыл бұрын

great stuff. much appreciate ya!

@alexoliman3198 Жыл бұрын

Wow. You put it all together so beautifully! You are great!

@jiyounbae4667 Жыл бұрын

Great content Karlton! Thank you so much!

@lasoundwaves Жыл бұрын

Great info! Thanks for taking the time.

@jacktsai7165 2 жыл бұрын

love it thanks for sharing!

@nathanmarsala3099 Жыл бұрын

You are a genius my good sir!! I thank you for all your videos!! I'm a new business owner and learning all of this the hard way till I stumbled upon your videos. I seriously love you my friend!😁

@sagarsriva Жыл бұрын

Amazing video! Love your passion about teaching this

@_Renee2 Жыл бұрын

Love the energy and knowledge!

@ugandarichardsonlcsw-ki3ct Жыл бұрын

This was really good. Thank you

@asliteb7942 Жыл бұрын

Thank you, KD for another amazing and easy to understand video. I am learning SO much as I prepare to become a business woman. TY

@cyrenthiaclark7382 Жыл бұрын

I watched til the end. This is gold. I read this, but I love you explanation!

@TT-vs2ti 11 ай бұрын

Wow thank you so much for this mind blowing content! Need this badly. You got a yourself a new subscriber.

@justinmcneil6195 Жыл бұрын

I've been thinking about this and now you just broke it down in such a easy way that I want to learn more about it

@davidjdoherty 7 ай бұрын

Really great explanation. I had read bits here and there but this is a really great primer to give people the base understanding of these concepts

@monicatemperly6247 Жыл бұрын

Thank you for the information. I appreciate it!

@googleuser6040 2 жыл бұрын

Love learning with you

@shannawang Жыл бұрын

Same here. Already knew about this for the past 10 months. Your video made it very clear and easy to understand. Great video. I must take action.

@TRXvaulterGIRL Жыл бұрын

Oh snaps! 🥳🤯 Loving your videos. Thank you for the knowledge.❣️

@Investorjimmorgan Жыл бұрын

Your awesome! Thanks for the valuable info. 🤑 Have a blessed day 🙏

@lkylky1730 Жыл бұрын

This guy is just too smart. One of the sharpest people that I have ever come across. Keep it up man! I have subscribed already. I will share the news to others. 🙏🏽👍🏼✊🏽

@danieldantonio1892 2 жыл бұрын

Very good video. Will watch multiple times. Would love to be able to talk more about this topic.

@wilport Жыл бұрын

By far the best explanation about this topic. Thank you Karlton

@envirogreentissueculture314 Жыл бұрын

Awesome video. Very informative. Thanks for showing us the power of leveraging.

@nikkidiaz2619 Жыл бұрын

Mind blowing content! Thanks Karlton for such valuable insight.

@davidm5298 Жыл бұрын

Thanks for the info!

@giovannialvarez807 2 жыл бұрын

Great information right here! Brandon hall real estate CPA has some great info on this too. Thank you karlton!!! Keep it coming!!!

@joshspence186 Жыл бұрын

Man your content is A1. Thank you.

@hans5821 7 ай бұрын

Feeling so lucky to have found your Channel. Thank you

@marionharris5952 Жыл бұрын

great video man. thanks.

@HighlightHeroesTV Жыл бұрын

Thank you so much!!!

@blair821 2 жыл бұрын

Love it. Just subscribed.

@christopherperson5097 Жыл бұрын

Hey Karlton, I’m patting myself on the back with a smile. 😁 thank you! 💪🏽

@mikelong3444 Жыл бұрын

Great content. I am not able to use this YET. However, once I build my infrastructure I will definitely be looking into this strategy. Thanks for sharing your studies.

@joejohnson4354 Жыл бұрын

There's limitations to all of this tho. Your tenants have to be less than 7 days on average (essentially must be airbnb or the like). I'd also assume that you can only depreciate an item in your home once. Meaning if you depreciate over a short number of years, after those years have passed, you can no longer claim a loss every year. How many airbnb rental properties truly have 200k per year of itemized depreciation as in the example? This video is a good concept but only applies to a small subset of people and most likely does not generate as large of a tax write off as the example implies

@albundy3929 Ай бұрын

This guy is full of bad advice.

@eddiemartinez9492 Ай бұрын

It's not bad advice but the original comment is correct.. this will work in year 1. Once you've done the cost seg you need a new property to do it again. Also, the STR is work. And much riskier than owning a straight up rental which would be considered passive.

@tlshachar 2 жыл бұрын

One of the most important videos I watched about how to leverage RE tax benefits... Thank you so much for putting this together. Super helpful!

@karltondennis 2 жыл бұрын

Glad you enjoyed it!

@cromeromail 8 ай бұрын

This was very informative Karlton. You earned a subscriber!

@flaviohernandez9720 Жыл бұрын

Awesome!! Thanks, will get in touch with you in time !!!

@BetterWealth 2 жыл бұрын

Great video brother!

@kaylag.997 Жыл бұрын

So glad I am subscribed to you

@adamyin2 Жыл бұрын

thats amazing, thank you so much!!!!!

@NJ-rl3jr Жыл бұрын

Literally Just changed the trajectory of my entire year! God Bless your ministry. Thank you brotha👏🏾

@beaconfish Жыл бұрын

Wow!! I finally understand it Thank you

@dave1ahc Жыл бұрын

What a great primer on this subject and really helps me a lot as a real estate professional and somebody that has an Airbnb. It seems that I qualify two different ways to move this passive losses over to my active income. Thank you so much for your detailed analysis of this and helping me to be more crystal clear on it. I always wondered how that was done!

@tax-modern 11 ай бұрын

Keep in mind that whether you're a real estate professional or it's a short term rental, to qualify for the passive loss rules tax benefits you still have to materially participate. That means if you just have a property manager managing it, you probably won't qualify. Just a heads up on that.

@ihtfp004 Жыл бұрын

Unreal content. Just subscribed.

@scottjackson9029 2 жыл бұрын

Thank you!! I just subscribed to your channel.

@swagymom 2 жыл бұрын

Great content Karlton knowledge sure is power…….

@AliceKovska Жыл бұрын

omg thank you so much for this information. i saved it and will be watching again probably when i get lost. i bought your moms course as well and it really breaks the tax code down.

@MK-tf8zb Жыл бұрын

I am trying to do this now, it is amazing how many CPA's do not know about this and are fixated on your method without the loophole or know nothing about it. I am actually teaching CPA's when I talk to them and I am nothing close to a CPA or tax professional. I just watched KD. Wish your firm KD was more affordable for those just starting off though. Would love to use this guys firm but they want at least $10k.

@alexsteven.m6414 11 ай бұрын

Some economists have projected that both the U.S. and parts of Europe could slip into a recession for a portion of 2023. A global recession, defined as a contraction in annual global per capita income, is more rare because China and emerging markets often grow faster than more developed economies. Essentially the world economy is considered to be in recession if economic growth falls behind population growth.

@fresnaygermain8180 11 ай бұрын

It's a delicate season now, so you can do little or nothing on your own. Hence I’ll suggest you get yourself a financial expert that can provide you with valuable financial information and assistance

@bernisejedeon5888 11 ай бұрын

Very true! I've been able to scale from $50K to $189k in this red season because my Financial Advisor figured out Defensive strategies which help portfolios be less vulnerable to market downturns

@bernisejedeon5888 11 ай бұрын

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@yolanderiche7476 11 ай бұрын

thanks for sharing this, I googled the advisor you mentioned and after going through her resume, I can tell she's a pro. I wrote her and I'm waiting on her reply

@orrd 11 ай бұрын

LOL THIS IS A FAKE CONVERSATION. This is a scam. One person is posting as multiple people to make you think someone is asking about an "advisor". It's all fake, guys.

@Dadnatron Жыл бұрын

Great video. Very helpful. Thank you

@scchung972 Жыл бұрын

Excellent .Ty so much.

@Leonardj3rd Жыл бұрын

Okay Karlton, you got my interest. Well explained Brother. I’m subscribed!!

@joanhngo-htxrealtor7451 2 жыл бұрын

Wow!!! You are such an inspirational guy!!! Love hearing you speak the truth and nothing but the TRUTH!!! Keep it going KD!!! :)

@humblebee7979 Жыл бұрын

What a smarty. 🤓 Great information - thanks for sharing your knowledge!

@soilbellefarm3710 Жыл бұрын

Thank you!!

@MC-kn6jl Жыл бұрын

Super informative video!

@yaseenms 2 жыл бұрын

Wow 🤩. You are something. You are very honest and nailed everything in simple terms.

@nicholasb9083 2 жыл бұрын

Glad I have found Carlton and the time to absorb his knowledge. Carlton, you just gave me chills with this one. You just saved me so much stress, time and money!! Thank you! I will most definitely be an avid subscriber!

@strikeflow1 Жыл бұрын

This is pure gold in video form thank you 🙏

@karltondennis Жыл бұрын

Glad it was helpful!I will be discussing more advanced tax strategies during the Tax Free Wealth Challenge! www.thetaxfreewealthchallenge.com

@transformationweightloss2846 Жыл бұрын

Amazing Video thanks for the Gems

@Zyas333 Жыл бұрын

I’ve listened to a lot of financial advice on KZfaq. This is the best. No BS, no repackaging obvious facts as insightful. This is just great stuff and 100% useful and not obvious.

@susanlang2645 Жыл бұрын

You are the ONLY one who makes this look like fun. In the middle of filing taxes right now and I feel like I got some really valuable information from this video. Thank you so much. ☀️

@consciousself5375 Жыл бұрын

You are God sent. Thank you for allowing Gos to use you for those of us who need your expertise🙌🏽🙌🏽

@MZK485 9 ай бұрын

Love it dude, looking forward to our call next week.

@tiawandagrace701 Жыл бұрын

Thanks for sharing

@mariyaasghar7539 Ай бұрын

Excellent explanation! Being a physician with minimal Tax knowledge, this was very easy to understand !

@awesomebosssoccer7387 Жыл бұрын

Hi Karlton. Thanks for sharing this information. I am thinking about investing in a 37 unit JV out of state. All 6 partners have a percentage of ownership, voting rights, sign on the loan and an active role. My role would be to prepare and update the financials. Would the hours spent in this role count towards material participation? Thank you!