Are you actually maximizing your tax deductions as a real estate investor?

In this episode of our series on how the tax code applies to and benefits real estate investing, we investigate the complexities of Real Estate Professional Status (REPS) with Brandon Hall, a leading CPA specializing in real estate.

Brandon breaks down the intricate details of REPS, offering a comprehensive explanation of its impact on tax deductions, and how it significantly enhances cash flow by allowing professional investors to offset passive income and capital gains with tax 'losses'.

For those unfamiliar with REPS, Brandon begins with a 101 explanation, clarifying that this status is not so easy to qualify because it requires meeting specific IRS criteria, including a 750-hour annual activity requirement and other benchmarks that Brandon discusses. He then dives deeper into the nuances, revealing strategies for documenting and substantiating one's active participation in real estate to meet IRS scrutiny.

Tune into this episode to gain invaluable insights from Brandon Hall on how REPS can bolster investment portfolio profitability for real estate professionals. Whether you are a novice in real estate investing or seeking to refine your tax strategy, understanding how to navigate these complex tax laws could be crucial to optimizing your returns.

This discussion is a must-listen for anyone looking to make informed decisions in their real estate investments, emphasizing the significance of REPS in the broader context of tax planning and investment management.

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In this brand new podcast series at GowerCrowd, The Real Estate Reality Show, we take a realistic view of commercial real estate investing, providing pragmatic insights for passive investors who are looking for sponsors they can trust and distressed opportunities they can invest in.

You’ll find no quick fixes or easy money ideas here, no sales pitches, big egos or hype.

You’ll learn how to build your wealth while protecting your capital investing as a limited partner in commercial real estate investments, even and especially during an economic downturn.

Subscribe to our free newsletter here. 

In today’s episode you are getting insights into the world of advanced tax strategies and asset protection for real estate investors with Mark Swedberg of Royal Legal Solutions. Mark shares a wealth of insights, drawing from his company’s unique model that he likens to a "fractionalized family office," providing high-level tax and legal strategies not just for the ultra-wealthy but for anyone earning over $150,000.

You’ll learn about the underutilized potential of private foundations, a strategy often misconceived as only for billionaires. Mark also shows you how setting up a private foundation can offer substantial tax benefits and charitable opportunities, proving it's within reach for many investors.

We also help you better understand the complex landscape of entity structuring, emphasizing the crucial role of LLCs and S Corporations in asset protection and tax minimization. Mark illustrates how these entities can be strategically used to enhance deductions, protect investments from legal threats, and optimize tax efficiency.

We also cover some lesser known and utilized tax strategies like the Augusta Rule, employing short-term rentals for tax advantages, and the concept of paying family members for legitimate business tasks to reduce taxable income. Mark emphasizes the importance of seeking tailored advice and education in navigating these strategies, ensuring they align with individual financial goals and lifestyles.

Tune in to gain Mark Swedberg's expert insights on leveraging legal and tax strategies to bolster your investment portfolio. Whether you're new to real estate or seeking to refine your strategy, understanding these sophisticated tax maneuvers is key to maximizing your returns, making this episode a must-listen for all real estate investors aiming for financial success.

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In this brand new podcast series at GowerCrowd, The Real Estate Reality Show, we take a realistic view of commercial real estate investing, providing pragmatic insights for passive investors who are looking for sponsors they can trust and distressed opportunities they can invest in.

You’ll find no quick fixes or easy money ideas here, no sales pitches, big egos or hype.

You’ll learn how to build your wealth while protecting your capital investing as a limited partner in commercial real estate investments, even and especially during an economic downturn.

Subscribe to our free newsletter here. 

My guest today is Aleksey Chernobelskiy who is principal at Centrio Capital Partners. Aleksey helps Limited Partners (passive investors in real estate syndications – aka ‘LP’s’) with existing and future investments, writing tips, and advising or providing educational content to help them navigate the current market, as well as make decisions on how to act and what to look for as they consider investment opportunities going forward.

Aleksey is a prolific writer. His background includes having run a $10 billion commercial real estate portfolio and he has a quadruple major, (gasp), from the University of Arizona in finance, mathematics, economics and accounting.

The insights he shares in today’s show are largely based on conversations that he has been having with LP’s who are facing issues with some of the deals that they've invested with and who are seeking guidance. He also offers independent third party counsel on how investors should be thinking about the commercial real estate environment in 2024.

Aleksey and I explore the essential aspects of LP investments, focusing on both the opportunities they present and the pitfalls that uninformed investors might encounter. We discuss how LP’s’ lack of knowledge can lead to avoidable mistakes and heightened risks, plus we talk about capital calls dynamics, managing investment dilution, and making informed decisions during a capital call.

Our conversation today provides invaluable guidance for LP’s looking to successfully make their way through the often complex world of real estate syndication, particularly during a downturn, while also providing a roadmap for comprehending the terms and status of an investments before contributing additional money during a capital call.

Watch this episode to learn from Aleksey Chernobelskiy's extensive experience in LP investments. Learn about his approach to tackling the intricacies associated with these types of investments, his tips on risk management, insights on maintaining an informed perspective throughout your investment journey, and his advice on leveraging knowledge to make sound investment decisions.

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In this brand new podcast series at GowerCrowd, The Real Estate Reality Show, we take a realistic view of commercial real estate investing, providing pragmatic insights for passive investors who are looking for sponsors they can trust and distressed opportunities they can invest in.

You’ll find no quick fixes or easy money ideas here, no sales pitches, big egos or hype.

You’ll learn how to build your wealth while protecting your capital investing as a limited partner in commercial real estate investments, even and especially during an economic downturn.

Subscribe to our free newsletter here. 

Are you maximizing your tax deductions as a real estate investor?

In this episode of our series on how the tax Code applies to and benefits real estate investing, we are doing a deep dive into cost segregation with Yonah Weiss, Business Director at Madison SPECS. Yonah provides an in-depth explanation of how engaging in cost segregation studies can increase cash flow by accelerating depreciation deductions resulting in tax ‘losses’ that can be used to offset passive income and capital gains.

For the uninitiated, Yonah explains cost segregation, an advanced tax deferral method that enhances depreciation deductions that effectively reduce the amount of taxes owed by property owners, in 101 terms and then provides a deep dive into the details, explaining how it can be used to dramatically increase cash flow and profitability.

We talk about the differences between residential and commercial properties in terms of their depreciation schedules (as well as explaining what ‘depreciation schedules’ are) and discuss the specific implications for each. Yonah explains how he and his company actually conducts a cost segregation study and, for what it costs (and I am not being paid to say this!), Yonah’s company engages in some highly skilled and what sounds like laborious and detailed analysis to run their cost segregation studies using engineers and tax professionals to look at assets.

Using case study examples, Yonah discusses how to manage potential longer-term liabilities like ‘depreciation recapture’ when selling a property – something I have always thought of as the defining characteristic of the tax code that, ‘what the IRS giveth, the IRS taketh away.’

We also discuss how the benefits of a cost segregation study can apply to both sponsors and their limited partners (investors) as well as under what circumstances there may be variances in how the benefits are applied across the entire investor cohort.

Tune into this episode to gain valuable insights from Yonah Weiss on employing cost segregation strategies to enhance your investment portfolio's profitability by boosting cash flow and profitability through savvy tax planning. Whether you are new to real estate investing or looking to refine your approach, understanding how to navigate these complex taxation strategies could be key to optimizing your returns and are one of the driving factors that make real estate so important an option for all investors.

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In this brand new podcast series at GowerCrowd, The Real Estate Reality Show, we take a realistic view of commercial real estate investing, providing pragmatic insights for passive investors who are looking for sponsors they can trust and distressed opportunities they can invest in.

You’ll find no quick fixes or easy money ideas here, no sales pitches, big egos or hype.

You’ll learn how to build your wealth while protecting your capital investing as a limited partner in commercial real estate investments, even and especially during an economic downturn.

Subscribe to our free newsletter here.