Real Estate Taxes – Huge Benefit of Real Estate Investing

Real Estate Taxes – Huge Benefit of Real Estate Investing

All of these questions on taxes and real
estate in capital gains and today, I’m going to share with you the six big
benefits of investing in real estate and how you can take maximum control and
advantage of all the real estate tax benefits that are out there just waiting
for you. Everybody, before we start posting in this
video, we are not tax advisers or we do not give tax advice, we are not professionals in tax. – Take us to your
leader. Alright, so we are here to talk about probably one of the most
enthralling topics like all of real estate land. Taxes. Oh my gosh, so much
excitement, right? I mean.. So here’s the deal, right. I mean taxes.. just cause I hit you
doesn’t mean.. Yeah, okay, probably cool. Guys, taxes. How do we stay
excited about taxes? What is it the tax provide? Why do we want to talk about taxes?
– There’s only one reason to be excited. The exciting thing is real estate does
100% give you hands-down the best tax advantages the country has to offer,
we get to be these blessed Americans in this country. If you’re not from America,
then come invest in our real estate and get some of that real estate action. For
those of you that live here, there are a ton of tax bennies that you pick up
along the way. We’re going to talk about six of them. – Tax bennies? Is that Benjamins
or is that benefits? – They can totally.. – Either way, right? – Benjamin’s. – Okay, either way, tax
bennies. Guys, first of all, interest write-offs. Now you know that when you
pay a mortgage payment, there is a portion of that that is interest, that
interest that goes into your real estate every single month is write off-able.
Is that a word? Is it a verb? Write off-able. – It is now. – I like it. Write off-able.
– It’s write off-able. Okay, the reason why that’s really important is
because your property is producing an income. If I receive a thousand dollars
of rent but I have to pay $700 in mortgage then the IRS is
going to look at that, they’re going to say, “Oh, well, we’re going to allow you to write
off the interest.” And you might say, well, I would expect that, that’s a business
expense. It’s cool that it is classified that way so that it can be treated as a
business expense but then tax benefit number two that
stacks on top of that is what’s called writing off the depreciation of the
property and as we break this down, what that ultimately means, and this is really
big, it means that you can show a loss on paper while you are taking handfuls of
money and putting him in your pockets. Okay, for the first several years that I
became a real estate investor, I did not pay taxes and the reason why is because
I got to write off the interest but I also got to depreciate the property.
– Then he spent four years in prison. No, I’m just kidding. No, guys, tax, this is the cool thing about
real estate taxes is, it can really allow you to pay, like Kris said, sometimes you
can almost pay nothing, sometimes you can pay nothing in taxes because of all the
wonderful things you’re taking advantage of, the interest write-offs,
the depreciations. By the way, on a home, on the structural, on the structure of
the home and the structural upgrades on the home, you can write-off or depreciate
that over twenty seven and a half years. – Let’s break that down. Let’s say that you
had a hundred thousand dollar property then the IRS will allow you to break
that out over twenty seven and a half years so take a hundred grand, divide
that by twenty seven and a half and that’s what you get to write off every
year. In that situation, that would be right around $3,000 a
year so here’s what that means.. If I were doing my math and it’s like, oh let’s say
that I made $3,000 of money this year of cash in hand after I
paid my mortgage then if I’m also writing off an additional three thousand
and depreciation, I kept three grand but it looks like nothing to the government.
Depreciation is a really really really big tax write-off when you’re
holding real estate long term. Now at some point, you’re going to have to sell
property. When you do, there’s what’s called a capital gain and the capital
gain is any money that you make above and beyond what you kind of put into the
profit. – It’s capital, it’s money, alright, it’s money gain, this is income. – Yeah, so
if I bought the property for $200,000 and I sell it for $300,000,
that movement from two to three hundred, that hundred grand, that’s called
the gains and they want to tax me on that and we’re going to show you how you can
get out of some of that legally and lawfully with some of the amazing tax
loopholes. Here they are.. Number one, tax defer it through a 1031 exchange.
It’s a special code that gives you a few months after the sell of a property to
say, hey, I’m filing a paper that says I’m going to do this special 1031 and I’m
going to take it and I’m going to put it in a similar pret type property and what
you’re basically saying is, instead of paying the taxes now, I’m going to defer it
and roll it into my next property and I forego paying those taxes today and
instead, I get to roll it into my next property continuing to pay me. Now
rolling that money and actually pays even more of it down expands your cash
flow and guess who’s even richer in real estate now? You
are. – So I want to talk about this real quick and I want to talk about this in
terms of a 401k. We’ve had other videos where we talk about 401k’s and by the
way, a 401k, one of the good things about a 401k is, it helps you to defer
taxes, right? but what real estate
does is this actually a much better tax deferment strategy rather than putting
your money in a 401k to defer those taxes, put it in real estate and then
roll it over to more and more and more real estate through a 1031 exchange and
defer those taxes. It’s amazing. – Now, there’s another way to defer. Let’s say
that a 1031 is what you do when you sell a property. How do I defer any taxes
period but still get money out of the property? You can do that through a rate
and term refinance. If you do a cash out refinance on the property, the money that
you get a refinance on a property means I’m keeping the property, I’ve got equity
into it, I’m working out a deal with the bank where I’m going to extract some of
that so I’m going to get this money cash in hand and keep the property. Normally, it’s
like, well you’ve got more money, you should pay taxes on that. If you buy it,
if you pull it out through a refinance, it’s actually tax deferred so this is
another amazing strategy for now not just having to sell the property like
with the 1031, this one is I get to keep the property and I get money and I don’t
have to pay taxes on it and I could either do, well I can do whatever the
heck I want but I can also roll it right back into real estate and keep expanding
my cash flow so this is another amazing tax strategy that comes with real estate.
– Friends, if you’re doing a real estate and if you’re doing it the right way
then your real estate is a business for you and so one great thing about having
a business that you’re operating is there our business right offs also. – Like
the example – Yeah, go ahead. – Well like your cell phone, right? Are you going to talk to a
tenant or your property management or a member of your team? That’s part of your
tax write-off or the vehicle that you drive. Where are you going?
Right? On a business leased automobile you can write off the entire
lease expense in the name of a business and there’s others as well. You can use
up to a certain percentage of your home as a home office and all the sudden, it’s
like, well, depending on how much you’re paying each year on your house, there’s a
percentage of it that you can say, hey, I don’t have to
pay taxes on that either because I have this amazing legal and lawful business.
– Absolutely. – My clothes that I’m wearing, I could not do business without
this clothes so these clothes is important. – These
clothes is, it’s amazing. Anyways, so the the last one here that we want to talk about is 2 to 5
years of PR shield. – You can’t remember, that’s okay. For those of you, we have a little cheat
sheets the side of the camera. I mean we know this stuff but we have to keep
ourselves straight and Steven doesn’t note that last code means. He sucks.
– Taxes. – Alright. Okay, the sixth and final benefit is a
really special code for those of you that are actually living in your home
that is your primary residence and normally when you sell a piece of
property, you got to pay capital gains but there’s a special code that says in the
last five years, if you spend at least two years living in that on that
property then we’re actually going to exempt you from any capital games. Now
this was huge. When I bought my first property, I bought it for a hundred and
ten thousand, ultimately sold it for around one $165,000
and so there was a $55,000 gain on that
property but I didn’t have to pay a single dollar in any taxes on that
increased value and the reason why is because of this amazing code, which is
why we always recommend that even the home you live in be treated as an
investment and as a part of the greater investment plan and strategy for your
real estate empire that you are building in growing. So friends, this was our video
today on the major different tax benefits and tax write-offs for capital
gains and real estate in general. Another one of the reasons that I love real
estate. So if you feel like you’re paying too much in taxes, you likely do not own
enough real estate and you know what? Steven and I, we can take care of that.
click this link in the top left corner up here and what we’ll do is, we are
going to lay down a custom game plan for you on how we can get you into more
profitable real estate, can give you more cash flow, feed your retirement and get
more of what you need in life while eliminating your taxes. – We’re going to
increase everything except for your taxes. – Yeah and we might not be able to
decrease all of your taxes but we can absolutely add incredible expansive
benefits who paying less taxes. – And if we can keep doing this, Nate will never shut
off the camera. – And make sure you that you subscribe and hit the bell. It’s time to
get yourself some real estate going and start taking advantage and cash in on
those tax advantages because you can make your next year way more tax
advantageous. Click the link up here, contact me and my team and we’ll start
making it happen and dishin’ up the good real estate for you right now.

25 thoughts on “Real Estate Taxes – Huge Benefit of Real Estate Investing

  1. first hehe

  2. Can we invest with you or no??

  3. im 17 and im thinking of starting the real estate business when im 20. If I buy 2 properties a year i'll have 30 properties by the time im 35. The only thing is getting a loan from the back can anyone give me advice?

  4. Can I buy 5 properties, rent 4, then after e years sell my primary and go live in a rental for 2 years and sell that tax free, the. Go live in the next for 2 and sell that????

  5. I believe the new 2018 tax deductions for improvements/depreciation with be spread over 25 years for residential and commercial….down from 27.5 years.

  6. your chemistry is getting better, and thanks for the good content! lol (smack, smack*)

  7. If buy a property with hard money, a year later I pay off the hard money with the rent I acquired would that be tax deductible?

  8. I don't think yall get along at all…..haha

  9. American's really do have a lot of incentives for real estate investors. I'm soo jealous of the 1031 exchange! Wish we had something similar in Canada!

  10. Awesome video, thank you for all the info.

  11. How does the new tax bill effect tax breaks on real estate investors like depreciation, interest, etc?

  12. You guys are hillarious and entertaining to watch. Do you guys provide services or mentoring? Thx.

  13. Hey there Kris, I'm at the moment considering going into real-estate, but I'm not sure if it works in The Netherlands. Do you have clients here?

  14. Hi Kris, is the tax benefit only for residents? How about foreigners intend to buy properties? What is the requirement for foreigner to buy properties? Are they allowed to buy?

  15. You guys are such nerds! I love it!!! Amazing videos

  16. Hey kris can you make a video about how it will be working with you and your team what is the ROI. how much to invest? How long can we work with your team and is it a one time fee? Really want to work with you guys but need to find out more information on it.

  17. interest is only deductible up to $750,000 of home principal though. And ya section 1250 is awesome

  18. Home office deductions are the easiest way to attract an audit lol

  19. Haha! You guys crack me up! Love seeing y'all crush it with some amazingly valuable content here on YouTube. Thanks for all you're doing to educate us on the real estate game. It's already helped me so much with planning our next business movs. Signing up for your course very soon. <3

  20. Lol. I commented on yesterday's video, pretty much asking for a video about this haha. Glad to see you have already made one.

  21. This is gold lol

  22. did not get business write-offs

  23. You CANNOT write off work clothes. The rules is that you can only write off clothes that are necessary and usable only for work. Technically, even steel toe work boots are not deductible, even if your occupation requires them.

  24. Super valuable content. And very entertaining. Am I the only one who notices the family cat wandering through the house on the occasional video? Lol.

  25. 2:48 hahahaahah OMFG you guys are funny

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