7 Tax Loopholes Only Rich People Understand
Published: 2024-09-27
Status:
Available
|
Analyzed
Published: 2024-09-27
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
In 2024, vehicles over 6,000 lbs can qualify for up to a 60% deduction in the first year under Section 179.
"according to Section 179 if you get a vehicle that weighs over 6,000 lb such as a G wagon you can get up to a 60% deduction in year 1"
Pending
Commercial buildings can be depreciated over 39 years, resulting in an annual tax break based on their value.
"what you do is you take 139th of this value so $800,000 ided 39 which is $20,500 a year"
Pending
A cost segregation analysis can allow for accelerated depreciation on building components, potentially leading to larger tax write-offs earlier.
"you could do is a cost segregation analysis... that way you can accelerate your depreciation"
Pending
Individuals with a gross adjusted income of $100,000 or less may be able to deduct up to $25,000 in rental losses.
"if your gross adjusted income is $100,000 or less you may deduct up to $25,000 of rental losses above $150,000 you can't deduct anything"
Pending
Qualifying as a real estate professional allows for the deduction of passive real estate losses against active income, bypassing certain restrictions.
"if you or your spouse can qualify for this real estate professional designation Now you can deduct this passive loss from your real estate Investments against your active income"
Pending
A 1031 exchange allows investors to defer capital gains taxes by reinvesting profits from the sale of an investment property into a new 'like-kind' property.
"what this says is you can do a like kind exchange and not pay taxes on your profits"
Pending
Upon death, inherited assets receive a stepped-up basis, meaning heirs are taxed on the value at the time of inheritance, not the original purchase price.
"your children are buying the house at the price that they get it at so if the property is worth $50 million you die and then you give it to your kids your kids are essentially buying this property with a basis of $50 million"
Pending
By structuring as an S-corp, business owners can pay themselves a salary and take the rest as a profit distribution, potentially reducing payroll taxes.
"you can pay yourself a $50,000 salary... and then you can take out $100,000 as a profit distribution and now because this is a profit distribution you don't have to pay that 15.4% tax"
Pending
An LLC can shield personal assets from business liabilities, limiting a claimant's recourse to only the assets held within the LLC.
"now your LLC owns this property tenant slips and Falls... all the tenant is entitled to is whatever is inside of this LLC"
Pending
Loaning funds to an LLC to purchase an asset can protect those funds from claims against the LLC, as the loan becomes a liability of the LLC payable to the individual.
"now instead of me depositing $100,000 into this LLC account what I'm going to do is I am going to loan myself this $100,000"
Pending
Vehicles over 6,000 lbs (like a G-Wagon) can qualify for up to a 60% deduction in the first year under Section 179.
"according to Section 179 if you get a vehicle that weighs over 6,000 lb such as a G wagon you can get up to a 60% deduction in year 1"
Pending
Commercial buildings can be depreciated over 39 years, resulting in an annual tax break of approximately $20,500 for an $800,000 building value.
"when it is a commercial building like this what you do is you take 139th of this value so $800,000 ided 39 which is $20,500 a year"
Pending
Single-family homes, when used as rental properties, can be depreciated over 27.5 years.
"if you're buying single family homes then it's 12 127 and A2 of the value of the building"
Pending
A cost segregation analysis can accelerate depreciation by assigning shorter lifespans to components like plumbing and flooring, allowing for larger deductions in earlier years.
"what you could do is a cost segregation analysis and what this means is somebody's going to walk through this property and they're going to say this is the lifespan of your plumbing this is the lifespan of your flooring this is the lifespan of your walls and other things in the property that way you can qualify for specific depreciation models for different parts of the building that way you can accelerate your depreciation"
Pending
Individuals with a gross adjusted income of $100,000 or less may deduct up to $25,000 in rental losses against active income, with deductions phasing out completely above $150,000.
"if your gross adjusted income is $100,000 or less you may deduct up to $25,000 of rental losses above $150,000 you can't deduct anything"
Pending
Qualifying as a real estate professional allows for the deduction of passive real estate losses against active income without the usual limitations.
"if you or your spouse can qualify for this real estate professional designation now you can deduct this passive loss from your real estate Investments against your active income and not have those same restrictions as before"
Pending
A 1031 like-kind exchange allows real estate investors to defer capital gains taxes by reinvesting profits into another investment property.
"what this says is you can do a like kind exchange and not pay taxes on your profits"
Pending
Upon death, inherited property receives a stepped-up basis to its fair market value, meaning heirs can sell it for that value with no immediate capital gains tax.
"your children are buying the house at the price that they get it at so if the property is worth $50 million you die and then you give it to your kids your kids are essentially buying this property with a basis of $50 million so if they sold it for $50 million they have a $ Z taxable income"
Pending
Converting an LLC to an S-Corp can lead to payroll tax savings by allowing owners to take a portion of their income as a distribution, which is not subject to payroll taxes.
"the whole idea here is when you make a big enough salary you can consider switching from LLC to an es Corp that way you only have to pay these Peril taxes on the money you pay yourself as a salary and the rest you take as a distribution"
Pending
Owning property through an LLC can shield personal assets from business liabilities, with a claimant only being entitled to the assets held within the LLC.
"now your LLC owns this property tenant slips and Falls the judge says well because you don't have insurance we're going to have to write a $100 million judgment against the owner of the property the owner of the property is not just just B Singh it's just Bri sing LLC and now all the tenant is entitled to is whatever is inside of this LLC"
Pending
Loaning funds to an LLC to purchase an asset, rather than directly depositing the funds, can create a scenario where the asset is acquired with a loan, which the claimant would then assume if they seized the asset.
"now instead of me depositing $100,000 into this LLC account what I'm going to do is I am going to loan myself this $100,000 just bed sing loans $100,000 here that means this property is purchased with a $100,000 loan now of course the loan is owned by just bu Singh but just bu Singh LLC owns this property worth $100,000 with a $100,000 loan to just Bing LLC"
Pending