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Real Estate Investing with Keith Weinhold



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How To Work the Tax System Like a Billionaire

• 41 min

Learn how to permanently reduce your tax burden. The greatest tax breaks for real estate investors are revealed. But first, home prices are permanently elevated because they’re larger and with more amenities than they had in the 1970s.  Today’s homes have vaulted ceilings, multiple fireplaces, granite countertops and more square footage. I describe. John Hyre, the Tax Reduction Lawyer, joins us for the first time. The top federal income tax rate is 37%. Learn where it’s headed next. On your short-term rentals (like Airbnbs), sometimes you can reduce your taxes by legally stating that it’s a “hotel”. Your rent income is taxed at less than your day job (W-2) income. Rent income is not burdened with social security and self-employment tax. Learn exactly how tax depreciation lowers taxable income for real estate investors. You’ll legally never pay any capital gains tax with a 1031 Exchange. We review how. Will the 1031 Exchange go away? John tells us how to get $100K tax-free out of your property—without doing an exchange. Timestamps: The direction of the marginal income tax rate [00:08:19] Discussion about the current marginal income tax rate and the potential for changes in the future. Tax changes under the Trump administration [00:09:22] Explanation of the Trump tax changes and the potential impact of those changes on real estate investors. Taxation of rental income [00:10:08] Explanation of how rental income is taxed differently from regular job income, specifically regarding self-employment and social security taxes. Opportunity and traps of Airbnb rentals [00:10:25] Discussion on the potential to convert Airbnb income into losses and the tax implications of Airbnb rentals. Making an Airbnb an active trade or business [00:11:41] Exploring the distinction between treating an Airbnb as rental income or hotel income for self-employment purposes. Accelerating depreciation with cost segregation study [00:14:17] Explanation of cost segregation study and how it can help real estate investors lower their taxable income by depreciating certain assets more aggressively. Tax Depreciation and its Benefits [00:21:34] Explanation of how tax depreciation works in real estate investing and its value in reducing taxable income. The Basics of 1031 Exchange [00:26:13] Overview of the 1031 exchange, a tax-deferred exchange that allows real estate investors to swap properties without paying capital gains tax. The Long-Term Benefits of 1031 Exchange [00:28:37] Discussion on the strategy of using 1031 exchanges until death to maximize tax deferral and potentially convert it into tax-free gains for heirs. The 1031 Exchange Trick [00:30:36] Speaker 3 explains a trick to maximize the benefits of a 1031 exchange by utilizing passive activity losses. The Pass-Through Deduction [00:33:21] Speaker 3 discusses the concept of the pass-through deduction and its application to rentals, providing insights on how to maximize the deduction. Future Tax Policies [00:36:15] The potential tax policies of Democratic and Republican presidential candidates are discussed, with an emphasis on their stance towards real estate and taxes. The 1031 tax deferred exchange [00:40:03] Explanation of the 1031 tax deferred exchange and its potential benefits for real estate investors. Disclaimer and advice [00:40:36] Disclaimer about the show not providing specific personal or professional advice, and the need to consult appropriate professionals for individualized advice. Sponsorship message [00:41:04] Acknowledgment of the show's sponsor,, as a platform for wealth building. Resources mentioned: Show Notes: Learn more about John Hyre: If you’d like help with one of  GRE’s Investment Coaches (free), start here: Get mortgage loans for investment property: or call 855-74-RIDGE  or e-

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