Category: Tax Benefits

Many doctors hear about Real Estate Professional Status and immediately assume it does not apply to them. They hear about the time requirements and think, “There’s no way I could do that.” They assume they would need to quit medicine completely. They assume this is something reserved for full-time real estate investors. But for doctors after 55, many of these concerns may no longer apply. As you cut back clinically, move to part-time work, stop taking call, shift to moonlighting, or enter retirement, you begin to get your time back. And when it comes to Real Estate Professional Status, time is not just a lifestyle benefit. It can become a tax-planning advantage. In many ways, REPS seems almost tailor-made for the doctor who is approaching retirement, semi-retired, or already retired. You may have more control over your schedule and more time to devote to rental property investing than you did during the busiest years of your career. My own path looked a little different from what many doctors after 55 may experience, but it shows how powerful it can be to create space for real estate. To qualify for REPS, I cut back clinically and shifted to moonlighting. That is

[Disclaimer: We are not accountants, lawyers, or financial advisors, so please consult your own team of professionals about the topics covered in this article.]   Are you facing a large capital gain from the sale of a property and looking for a way to defer the capital gains tax? A Deferred Sales Trust (DST) is an alternative to a 1031 exchange that may be a better fit for some real estate investors. A Deferred Sales Trust is a financial tool that allows you to defer paying capital gains taxes when you sell an appreciated asset, like real estate or even a business. Instead of selling your property and getting hit with a huge tax bill, you place it in a trust. The trust then sells the property and spreads out the payments to you over time. This allows you to spread out your tax payments as well. But when should you consider using a DST, and how exactly does it work? Let’s break it down.   When Might a Deferred Sales Trust Be the Right Choice for Real Estate Investors? If you’re a real estate investor, you know the power of deferring taxes—it’s one of the big reasons people love

In this Doctors Building Wealth episode, we sit down with seasoned CPAs and real estate investors Amanda Hahn and Matt McFarland, the minds behind Keystone CPA, who share five powerful tax-saving strategies tailored for real estate investors. If you’re a high-income professional, especially in medicine, looking to reduce your tax burden, this podcast episode is a must-listen.   Amanda and Matt reveal practical, no-nonsense strategies—from structuring short-term rentals for optimal tax benefits and using LLCs effectively to paying your kids (yes, it’s legal!) to maximize deductions. Plus, they cover savvy approaches to leverage “lazy assets” like stocks and retirement accounts, boosting your portfolio without adding hefty tax liabilities. This episode is just a glimpse of the expert insights shared at our 2024 Fast FIRE to Freedom Summit! If you’re ready to dive deeper into wealth-building strategies, tax-saving tips, and expert guidance for a prosperous 2025 and beyond, grab access to the entire four-day Summit replay. You’ll get lifetime access to 16+ hours and learn directly from seasoned investment pros to start taking control of your financial future today! 🎧 Listen to this week’s podcast episode now to discover from Amanda and Matt how to keep more of what you earn, grow passive income, and secure your

[Disclaimer: We are not accountants, lawyers, or financial advisors, so please consult your own team of professionals about the topics covered in this article.]   In real estate, tax “status” or “designation” plays a crucial role in determining how income and expenses are treated. One particularly important tax status is that of a real estate dealer, also known as a real estate developer. This status, defined by IRS guidelines and case law, comes with specific tax implications that differ significantly from those applied to real estate investors. Understanding this distinction is essential for anyone involved in frequent real estate transactions, particularly those who flip properties or develop land.   What Is Real Estate Dealer Status? A real estate dealer is defined as someone who holds properties primarily for sale to customers in the ordinary course of business. The IRS looks at individuals or entities engaging in real estate transactions to determine whether they should be taxed as dealers or investors. While an investor holds properties for appreciation and rental income, a dealer’s primary intention is to sell properties for profit.   IRS Factors for Determining Dealer Status The IRS considers several factors when deciding if someone is a real estate

[Disclaimer: We are not accountants, lawyers, or financial advisors, so please consult your own team of professionals about the topics covered in this article.]   Depreciation recapture is a critical concept for real estate investors, particularly when selling a property. While depreciation provides significant tax benefits during ownership, it comes with a catch when it’s time to sell: depreciation recapture. In this article, we’ll explore what depreciation recapture is, how it works, and strategies to minimize its impact.   What Is Depreciation and How Do Investors Benefit? Depreciation is a tax deduction that allows real estate investors to account for the wear and tear on their properties. The IRS recognizes that properties lose value over time due to usage, so it allows investors to deduct a portion of the property’s value from their taxable income each year. In residential real estate (single-family homes, small and large multifamily properties), the depreciation period is 27.5 years, while for commercial properties (e.g., short-term rentals, medical office buildings), it’s 39 years. Investors can further enhance these benefits using accelerated depreciation methods, like cost segregation, which allows them to depreciate certain components of the property faster than the standard timeline. Additionally, bonus depreciation can be