Joe: Hey, it’s Joe Crump. Welcome back. I’ve
got another video question for you. This one is from Frank Lerby. Frank says,
Frank: “How can I share or give my tax deductions from one of my rental properties to a new
partner? Or in other words, let’s say I don’t need the write-off, so can I share or give
the write-off to my partner so that they can get more on their tax return to reinvest with
me on another property? Thanks, Joe. I’ve managed my own properties for over 18 years.
My first property was in 1976 when I was 21, and from there, I’ve found two more homes
and a four year unit over the next three years that I fixed up back then.”
Joe: So, good, you’ve got some experience. You’ve been around for a while. I started
in 86′. You started 10 years before me. Anyway, Frank, you can break up the tax deductions.
But the way that you do it — and let me say right up front here — I’m not a tax attorney,
and your situation or your partners situation may be different because it makes a difference
on whether they’re a full time investor or they’re not, or a full time real estate profession
or not, and they need to talk to their attorney about this, but, the way this has been done
in the past is to put it into an LLC. Then, you can break up the ownership of a property
any way you want to. Joe: And, you can sell off pieces of it. You
don’t just have to give it to them — you can sell it to your partner or have them loan
you money without his collateral. There’s a lot of good ways that you can use the tax
deductions, the depreciation on a property. Joe: Don’t underestimate the value of depreciation.
If you own a lot of properties, your depreciation on those properties doesn’t cost you anything
to get, but it can dramatically reduce your income. If you’re a high income earner, or
you own a lot of rental properties, it’s a wonderful thing, because your rental property
depreciation will offset a huge amount of your income and make it possible for you to
pay very low taxes. That’s why people that make a lot of money don’t pay a lot of taxes
— there’s lots of opportunities for them to save. Anyway, I hope that helps.