The #1 Tax Strategy for New Investors (Rental Loophole) | Bigger Pockets Video

Episode #521

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Most people invest in real estate for cash flow or appreciation, but there are enormous tax benefits as well. In this episode, we’re going to share the number one tax strategy you need to know about—the short-term rental tax loophole—which could save you thousands!

Welcome back to the “Real Estate Rookie” podcast! Today, we’re joined by Sean Graham, who is not only a certified public accountant (CPA) but also a fellow real estate investor. He’s going to show YOU how to avoid paying Uncle Sam (legally) with just a few savvy tax strategies. The best part? You don’t need to be a big-time investor with a large real estate portfolio to take advantage of these benefits. Even if you have just ONE rental, these strategies are for you!

First, Sean will share the ins and outs of the cost segregation study, which allows you to frontload depreciation rather than spreading it out over the next few decades. He’ll also get into bonus depreciation and the different line items that qualify, as well as the tax “loophole” that allows you to use tax deductions to offset active income—yes, including your W2 wages!

00:00 Intro
00:36 What Is Cost Segregation?
06:33 Short-Term Rental Loophole
13:10 Other Strategies & Pitfalls
20:21 Bonus Depreciation 101
25:24 How to Do a Cost Seg Study
28:05 Cost Segregation Study
33:28 Connect with Sean!