Why Short Term Rentals Can Save You on ALL Taxes
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- Опубліковано 5 вер 2024
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*Disclaimer: I am not a financial advisor nor am I an attorney. This information is for entertainment purposes only. It is highly recommended that you speak with a tax professional or tax attorney before performing any of the strategies mentioned in this video. Thank you.
#taxes #taxfreeliving #taxexpert #taxreduction #llc
![How to Use Rental Losses to OFFSET W2 Taxes! [Part 1]](http://i.ytimg.com/vi/1a38vrvO-ko/mqdefault.jpg)
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4:40 timestamp 7days or less
6:15 timestamp 30 or less while providing services
Please make a video on depreciation recapture!!🙏 asap
I'm surprised you didn't say anything about the 100 hour rule for materially participating 1 of the 7 ways to unlock the loophole
Do you have a link to this where I can read more?
My three favorite channels: Karlton Dennis, Stock Brotha, & Richard Fain. Make my week complete!
Never heard of stock brotha but I definitely just sub to see 💪🏾
Facts
Thanks for continuing to teach us this. 🙏🏾
How much can you depreciate to minimize your income taxes to justify the hassle of running a short term Airbnb? It's great to learn the info but most people aren't going to do this.
I learned more from you than I did in K-12
Karlton, I am a high W2 earner in the 35% tax bracket. I'm planning to upgrade my home, but unsure if I want to sell ($100-150K tax free cap gains will be had) or utilize it as an airbnb for tax savings. Would love to hear your opinion... I signed up for a consultation ... hope to hear back soon!
Excellent, Karlton! Thanks for sharing your expertise on this topic!
Awesome video! Please can you share your thoughts on the 100K W2 income limit?
Really enjoying these very informative videos, and love your passion for the subject. You're a natural and gifted teacher. Question on short term rentals: Assuming seven days or less, how many times a year must you rent it to qualify? What if you only rent it 2 or 3 times a years. Say, 21 days max, is that enough? Also, you mention depreciation, but what about expenses like lawn care or pool cleaning? Can those be balanced against Active W-2 income? Also, from your previous videos, I'm assuming I should set this rental property up in an LLC.
You can not use the unit for more than 14 days a year or 10% of the rental days so you can't circumvent using the dwelling all year minus a few weeks. You also can not use the expenses like lawn care or pool cleaning against your W-2 or active income unless you follow what Karlton said above (1 of the 6 ways around it or being a REP).
Thank you!
Man, your channel is the SHIT!!!
The way you explain the information is exquisite.
I appreciate you for your help.
Thank you
Excellent presentation of the information! Thank you.
What if it’s a seasonal property, how much of the year does it have to be rented out to right off against W-2?
AWESOME RECAP on Short Term rentals
Great video Mr. Dennis as always. Thank you sir.
No one Explains this better! Thank you!❤🙏
airbnb is a bit complicated since now all the cities want to get a piece of the cake. You have to get them approved by the city before renting the property to any renter.
The problem with this strategy is that if and when your rentals show a profit (I mean, isn't that the goal of any investment, to make a profit), you will now have to not only pay income tax, but also a 15.3% SE tax on top.
Yes and no. Whether or not you have to pay SE tax is entirely dependent on whether you provide substantial services (hotel-like services). So you could have a short-term rental (less than 7 days average stay) and not provide substantial services, which would qualify you for the deduction against your other income but you wouldn't be subjected to SE tax.
Dear IRS, "I sleep all day and don't provide any services to the tenant". What is the IRS going to do? Send a T800 back in time to monitor your daily activities from two years ago? The IRS will have a hard time proving their case that you DID provide services.
Real Estate Professional Log Booklet??? Where's the free copies at goat
Does this is apply if you are renting 40-50% of your primary residence as Airbnb for example? I appreciate the info great work!
KD you got me feeling like a official unofficially EA 😂
Can I do this using my basement? 1bd 1 bath 1 living room 1 kitchenette renting a portion of my house as an air bnb?
Hi, thank you for this information. How much can you depreciate to minimize your income taxes to justify the hassle of running a short term Airbnb? average?
Hi Karlton what can you advise on overseas short term rentals?
Great information! Soooooo Beneficial!
Hi Karlton. How do I contact you privately for your services? Thank you.
Can you do this with an ADU?
Mastermind ✊🏾
Is running a management company to manage a commercial property considered a real estate professional activity to offset active income?
Does the strategy work on foreign short term properties
Great information
That seem like a lot of work. You mentioned you can a rep for 750. Do you have to submit those hours or just need that handy in case of audit ?
So will this work if you Airbnb half of your house and live in the other half
Great info. Wondering this. If the LLC has several residential rentals (say 4 in this example) and one of the rentals is STR does that mean I now obtain Rep Status and can now unlock the material participation status of all the other rentals as well?
Or, does the status only apply to the losses on the one STR?
Real estate professional status is unrelated to the rentals being short-term. If you're using that strategy, that works for all rentals that you materially participate in, they can be long or short term. It's irrelevant if they are in an LLC or not. A single member LLC is always disregarded for tax purposes and won't affect any tax strategies.
is a fix n flip considered active and get the same good writeoffs?
FANTASTIC VIDEO!! 🔥🔥🔥
Can you please let me know where the IRS states that short-term rental that are rented less than 7 days can be declared as a ordinary income instead of passive income.
www.irs.gov/publications/p925#en_US_2023_publink1000104581
It's listed under Rental Activities and is the first line item that is an exception.
how do you add services if you live out of state? can you pay people locally to "provide the service"
Material participation hours have to be you putting the time in yourself (or your spouse). If you hire someone else to do that work, those hours don't count towards material participation. At my tax practice we generally never clients who can qualify for material participation if they use a property manager or if it's not a local rental property.
Hi, question. How does this work with the new Tax changes? Thank you.
Is there a minimum amount of nights the Airbnb needs to be rented for the year to qualify for the tax loophole?
Karlton, great video. Is there a minimum amount of nights a short-term rental must be booked per year?
If the property isn't a full-time rental property (if you mostly use it for personal use for example), then these strategies won't work to offset expenses from the rental against your other income.
Could this work with renting an rv on places like RV share? It’s just like air b n b
Can I do short term rental for a month to get this tax savings and then lease for a long term rental?
Your average stay for all stay during the year would need to be less than 7 days (or less than 30 days with substantial services). So that generally wouldn't work because the math doesn't work.
16:47 what benefit does a series 8 if any . I’m thinkin about llc and series 8 and what else …. 😢
Does owning a rental aboard give u the same tax benefits
Pure game💪🔥🔥
I have an A-frame cabin in Lake Tahoe and actively promote/advertise local services such as 'in-cabin massage' and 'personal chef' to my STR...is this considered material participation? I am also on Peerspace for photoshoot, day-time rentals...is this 'non-exclusive use'?
the guy just made it to the washington post for giving "illegitimate tax" advice. i wonder if the IRS agent is coming after these online influencers.
Hi Karlton, can accelerated depreciation loss be deducted from K-1 income tax? Or interest income? I appreciate it. 🙏
Yes, but only if you meet the criteria he outlined such as a STR or REP.
so based on rentals that are 7 days or less do i report the income on a schedule e or c?
@Karlton @Admin, what if you charge by week? Can the code be applied then?
Rooms are rented by the week. Most people keep renewing weekly and stay a couple of months.
Will this strategy apply in this situation?
Thank you for sharing your knowledge with us! :)
In that can your average stay would be longer than 7 years, and assuming you also aren't providing hotel-like services, you wouldn't qualify for the short term rental deduction method he talked about.
@@tax-modern thank you for responding!
You are awesome
Way to go Reagan 🙄
Will you do my taxes
Carlton - are you solely doing these videos to funnel clients to force use your company for real estate investing. Because i tried calling your company for advice and they wouldn't entertain me unless i sign a contract with them. That's fucked up
Any average CPA does what most of what this guy talks about. Nothing new here. You are lucky to not fall in his trap.
He already provides a ton of content for free and helps you understand questions to either ask your own CPA or hire him. Of course he makes these videos to not only make money on UA-cam, but to grow his business. Lastly, why in the world would they give you advice for free? I do agree with amitsehg though, a good CPA will do about 90% of these things, but you need to know what questions to ask sometimes to unlock these savings.
1,000th like!!
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