Oct 20, 2021
How profitable is it to be a real estate professional? Is it true that the higher your income and sales, the higher the tax you’ll be paying?
Justin welcomes Yonah not only to talk about his company, Madison SPECS, but also the bonuses and taxes that come with real estate investing. He discussed using depreciation from one property to offset income to the other. They also discuss using passive losses against active income if you’re registered as a Real Estate Professional in your tax return and more about the depreciation recapture tax.
Highlights
- A little background: Madison SPECS? - 1:57
- With the change in the tax code, what are the other things that can have an impact? - 4:51
- Real estate has been mainstream. - 6:53
- Cost segregation: The awareness problem. - 9:00
- Running a feasibility study on a property. - 16:50
- Factoring the years into the holding and repositioning strategies. - 19:47
- What is Year One Bonus and why do we have it? - 24:18
- States which don’t recognize it. - 27:50
- If you write down Real Estate Professional as your profession on your tax return, you’ll have a special designation in the eyes of the IRS. This allows you to use the passive losses against active income. - 28:29
- When you do an exchange, what’s considered personal, and how does it affect your exchange? - 31:00
- The depreciation recapture tax. - 35:00
- Factoring in your tax return. - 36:16
- Where to find Yonah? - 37:33
Episode Resources - Connect with Yonah Weiss
- https://www.madisonspecs.com/
- https://www.linkedin.com/in/cost-segregation-yonah-weiss
- Connect with Justin Smith
- https://smithcre.com/
- https://www.lee-associates.com/
- jbsmith@leeirvine.com
- https://www.linkedin.com/in/justinbsmith