#1 Simple Way To LEGALLY Pay $0 Taxes (IRS Doesn’t Want You To Know)

"The base depreciation that you get to qualify for if it is a single family property like this is 127 and a half of the value of the property. Remember, the value of the property is 200 grand. The value of the land is $50,000. This is the the basic that you get to qualify for. I'll show you what that actually means. And just for those of you that are a little bit more financially nerdy, if it is a commercial property, you qualify for 139th. But because it's a single family property, what that means is you take $200,000, the value of the property, divide that by 27.5. That's how much of a deduction that you get for the next 27 years."

"So, in that first year of us buying this property, we should qualify for a 20% depreciation on the value of the property. So the value of the property is again $200,000. The land is $50,000. You do not get to depreciate the value of the land. So $200,000 property, 10% of that is $20,000. So now you have $15,000 of profit and you take a $20,000 write off. This is depreciation. And now you have a $5,000 loss."

"Except you don't have to pay it with real estate because in real estate you can qualify for something called the 1031 like kind exchange which says if you take this property and sell it for a profit in this case $500,000 you can take all this new money all this $500,000 go out and buy another property can be bigger nicer more rental income and now you can pay 0 in taxes on that appreciation on that gain."

"And then we have a newly modified section 179 rule which says that because of section 179. If you buy heavy machinery for your business, you can take up to a 100% write off on that machinery in year one."

"A G Wagon weighs over 6,000 lb. So, it gets to qualify for this heavy machinery deduction. And this G Wagon, let's say, I'm going to draw it right here. It's going to be pretty ugly drawing, but let's say this Gwagon costs $100,000. And then you take $20,000 from here and you put it down. So, you use $20,000 as a down payment. And let's assume for the purposes of this example that you use this G Wagon 60% for business, 40% for personal use. So if it's 60% for business, that means you take 60% of the value of this G Wagon, which is $100,000. And now you can take the $60,000 and use it as a tax write off."

"So you have $50,000 of profit. You take the $60,000 deduction. You have minus $10,000 loss. And now if you work a job or your spouse works a job, you can take this $10,000 loss and you can reduce that job income because you have a loss in the business."

"Which means if you start a side hustle for your business idea and that side hustle has an actual business plan that you can document and you spend money on that side hustle. Maybe you have a cooking blog that you start. Maybe you start a podcast. Maybe you start whatever it is that you're interested in and you spend money in it and you're generating some revenue but you're losing money. Well, the loss that you have for your business investment can be used to potentially lower your income that you make from your job."