How to Kushner my taxes?

[Anonymous]

Anonymous wrote:Op, but a multifamily house. Rent out a portion and take depreciation on that portion. Any repairs done.to the house or maintenance that effects that portion can be written off your taxes (depending on what it is). Heating oil or gas, electricity if shared, a portion written off. The rent is treated differently than W-2 income taxwise.

Fund your pretax retirement accounts and HSA to lower your taxes. Also, fund a Roth IRA. You pay taxes now but won't later when you withdraw the gains. Set up.a.529 for your kid for the state tax break. If your kid is 13 or under and needs childcare or camp, fund a dependent care flex spending account.

Lots of little ways to cut down on your taxes. Not Kushner level but normal MC or UMC level.

This is helpful, thanks. I cannot do the multifamily house bit, but I can rethink all the other parts and make sure I'm maximizing them.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Op, but a multifamily house. Rent out a portion and take depreciation on that portion. Any repairs done.to the house or maintenance that effects that portion can be written off your taxes (depending on what it is). Heating oil or gas, electricity if shared, a portion written off. The rent is treated differently than W-2 income taxwise.

Fund your pretax retirement accounts and HSA to lower your taxes. Also, fund a Roth IRA. You pay taxes now but won't later when you withdraw the gains. Set up.a.529 for your kid for the state tax break. If your kid is 13 or under and needs childcare or camp, fund a dependent care flex spending account.

Lots of little ways to cut down on your taxes. Not Kushner level but normal MC or UMC level.

This is helpful, thanks. I cannot do the multifamily house bit, but I can rethink all the other parts and make sure I'm maximizing them.

I'm the PP. We only have experience with owning a multifamily house but would you be able to occasionally Air BnB a room or section of your home? Perhaps there are tax advantages to that that other posters th speak to? My DH also has a wide hustle and the money from that is faded differently than W-2 also.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Op, but a multifamily house. Rent out a portion and take depreciation on that portion. Any repairs done.to the house or maintenance that effects that portion can be written off your taxes (depending on what it is). Heating oil or gas, electricity if shared, a portion written off. The rent is treated differently than W-2 income taxwise.

Fund your pretax retirement accounts and HSA to lower your taxes. Also, fund a Roth IRA. You pay taxes now but won't later when you withdraw the gains. Set up.a.529 for your kid for the state tax break. If your kid is 13 or under and needs childcare or camp, fund a dependent care flex spending account.

Lots of little ways to cut down on your taxes. Not Kushner level but normal MC or UMC level.

This is helpful, thanks. I cannot do the multifamily house bit, but I can rethink all the other parts and make sure I'm maximizing them.

I'm the PP. We only have experience with owning a multifamily house but would you be able to occasionally Air BnB a room or section of your home? Perhaps there are tax advantages to that that other posters th speak to? My DH also has a wide hustle and the money from that is faded differently than W-2 also.

^^side husle, not wide lol. Oh, and you're welcome! I get helpful into on this board, too, and like to share.

[Anonymous]

Our life changed last year when we bought a rowhouse with a basement-level apartment. Seriously, the tax benefits are enormous. We essentially make $24K/year tax-free on the rent due to deductible depreciation and related expenses. Anything we pay to maintain the house we basically get an automatic 33% discount. If I need a new roof, I can deduct one-third of the cost against my rental income. Same with my property taxes, utilities (provided to my tenants), internet bill, and even my cable bill. Oh, we need a new laptop, which we use extensively to manage our property? Depreciate and deduct it.

It's just ridiculous how rigged our tax system is for real estate owners. This is the real government welfare.

[Anonymous]

Anonymous wrote:Our life changed last year when we bought a rowhouse with a basement-level apartment. Seriously, the tax benefits are enormous. We essentially make $24K/year tax-free on the rent due to deductible depreciation and related expenses. Anything we pay to maintain the house we basically get an automatic 33% discount. If I need a new roof, I can deduct one-third of the cost against my rental income. Same with my property taxes, utilities (provided to my tenants), internet bill, and even my cable bill. Oh, we need a new laptop, which we use extensively to manage our property? Depreciate and deduct it.

It's just ridiculous how rigged our tax system is for real estate owners. This is the real government welfare.

Uh.. have you talked to your accountant about this pp?

[Anonymous]

I would like to know how people pay the capital gains tax instead of their own tax bracket? All of my gains in the stock market somehow get taxed under my own tax bracket even though they're reinvested.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Our life changed last year when we bought a rowhouse with a basement-level apartment. Seriously, the tax benefits are enormous. We essentially make $24K/year tax-free on the rent due to deductible depreciation and related expenses. Anything we pay to maintain the house we basically get an automatic 33% discount. If I need a new roof, I can deduct one-third of the cost against my rental income. Same with my property taxes, utilities (provided to my tenants), internet bill, and even my cable bill. Oh, we need a new laptop, which we use extensively to manage our property? Depreciate and deduct it.

It's just ridiculous how rigged our tax system is for real estate owners. This is the real government welfare.

Uh.. have you talked to your accountant about this pp?

I was wrong on the roof part - that flows through depreciation, not deduction. It would be deductible as a roof repair (ordinary maintenance), but not a new roof (improvement). But yes, I've talked with my accountant (my father-in-law).

[Anonymous]

Anonymous wrote:

Anonymous wrote:Our life changed last year when we bought a rowhouse with a basement-level apartment. Seriously, the tax benefits are enormous. We essentially make $24K/year tax-free on the rent due to deductible depreciation and related expenses. Anything we pay to maintain the house we basically get an automatic 33% discount. If I need a new roof, I can deduct one-third of the cost against my rental income. Same with my property taxes, utilities (provided to my tenants), internet bill, and even my cable bill. Oh, we need a new laptop, which we use extensively to manage our property? Depreciate and deduct it.

It's just ridiculous how rigged our tax system is for real estate owners. This is the real government welfare.

Uh.. have you talked to your accountant about this pp?

Not the PP, but I am in the identical situation, and the PP is absolutely right. I do exactly the same thing as the PP with the basement rental in my DC rowhone and take all the same deductions. And, yes, I have an accountant.

The one thing to remember, though, is when you sell your row home you will be paying depreciation recapture tax at a 25% rate for 1/3 of your gain on the sale of your home PLUS capital gains taxes on that 1/3. In other words, the IRS will treat 2/3 of your house as a personal residence subject to the exemption from capital gains taxes, but will consider 1/3 of your house to be the sale of an investment property.

[Anonymous]

Anonymous wrote:I would like to know how people pay the capital gains tax instead of their own tax bracket? All of my gains in the stock market somehow get taxed under my own tax bracket even though they're reinvested.

You're mixing two different things. Capital gains taxes are for realized capital gains (ie, appreciation). For example, let's say you buy 1 share of stock for $100. You hold it in your account and it appreciates in value. Let's say it grows so it's worth $150. That's $50 in appreciation. But you don't pay any taxes on that appreciation until you sell the stock. So, if you sell it for $150, you pay capital gains tax on the $50 in appreciation. If you just hold the stock, you don't pay capital gains taxes.

Dividends are capital distributions. So, in the example above as you were holding that single share, you maybe received a dividend each year. Let's say that, in addition to and separate from the appreciation (ie, the growth in the value of the stock) you also receive a $5 dividend from the stock. That $5 dividend is *ordinarily* taxable as regular income taxes (at your regular income tax bracket). Even if you "reinvest" the $5 dividend, it is still *ordinarily* taxable as income.

So, you'd pay your regular income tax rate on the $5 dividend each year. And then when you sell the stock you'd pay capital gains tax on the $50 in appreciation as a one-time tax.

(*note, some dividends are called qualified dividends and for those you pay capital gains taxes. Other dividends are nontaxable entirely.*)

[Anonymous]

Anonymous wrote:

Anonymous wrote:I would like to know how people pay the capital gains tax instead of their own tax bracket? All of my gains in the stock market somehow get taxed under my own tax bracket even though they're reinvested.

You're mixing two different things. Capital gains taxes are for realized capital gains (ie, appreciation). For example, let's say you buy 1 share of stock for $100. You hold it in your account and it appreciates in value. Let's say it grows so it's worth $150. That's $50 in appreciation. But you don't pay any taxes on that appreciation until you sell the stock. So, if you sell it for $150, you pay capital gains tax on the $50 in appreciation. If you just hold the stock, you don't pay capital gains taxes.

Dividends are capital distributions. So, in the example above as you were holding that single share, you maybe received a dividend each year. Let's say that, in addition to and separate from the appreciation (ie, the growth in the value of the stock) you also receive a $5 dividend from the stock. That $5 dividend is *ordinarily* taxable as regular income taxes (at your regular income tax bracket). Even if you "reinvest" the $5 dividend, it is still *ordinarily* taxable as income.

So, you'd pay your regular income tax rate on the $5 dividend each year. And then when you sell the stock you'd pay capital gains tax on the $50 in appreciation as a one-time tax.

(*note, some dividends are called qualified dividends and for those you pay capital gains taxes. Other dividends are nontaxable entirely.*)

Ahh. Ok thank you!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our life changed last year when we bought a rowhouse with a basement-level apartment. Seriously, the tax benefits are enormous. We essentially make $24K/year tax-free on the rent due to deductible depreciation and related expenses. Anything we pay to maintain the house we basically get an automatic 33% discount. If I need a new roof, I can deduct one-third of the cost against my rental income. Same with my property taxes, utilities (provided to my tenants), internet bill, and even my cable bill. Oh, we need a new laptop, which we use extensively to manage our property? Depreciate and deduct it.

It's just ridiculous how rigged our tax system is for real estate owners. This is the real government welfare.

Uh.. have you talked to your accountant about this pp?

Not the PP, but I am in the identical situation, and the PP is absolutely right. I do exactly the same thing as the PP with the basement rental in my DC rowhone and take all the same deductions. And, yes, I have an accountant.

The one thing to remember, though, is when you sell your row home you will be paying depreciation recapture tax at a 25% rate for 1/3 of your gain on the sale of your home PLUS capital gains taxes on that 1/3. In other words, the IRS will treat 2/3 of your house as a personal residence subject to the exemption from capital gains taxes, but will consider 1/3 of your house to be the sale of an investment property.

The rich don't sell, they bequeath. Or, do as the Trumps did, and get an under-valuation upon the transfer of the assets to heirs to minimize tax burden (which apparently is total legal).

It's absurd how rigged the tax game is for real estate owners.

[Anonymous]

Anonymous wrote:There was the big story this weekend that JK didn't pay anything in federal taxes. And there was a fight between those defending him for being smart and using the tax code to his advantage and those saying that those codes only help the rich.

I'm not rich. I'm barely making it. I make less than 100K. I'm a single parent. I have a fed job. What do I need to do to maximize how I do things so I'm not losing about a 1/3 of my salary to taxes every year. Help my Kushner my income.

Go.

Marry someone who lives off investment income and stop working.
As an employee you can't Kushner your income.

[Anonymous]

Anonymous wrote:There was the big story this weekend that JK didn't pay anything in federal taxes. And there was a fight between those defending him for being smart and using the tax code to his advantage and those saying that those codes only help the rich.

I'm not rich. I'm barely making it. I make less than 100K. I'm a single parent. I have a fed job. What do I need to do to maximize how I do things so I'm not losing about a 1/3 of my salary to taxes every year. Help my Kushner my income.

Go.

Borrow a shitload of money and invest in property. Your tax savings will be the silver lining when you scramble every month to make your debt payments like Jared.

[Anonymous]

Anonymous wrote:I would like to pay the capital gains rate on my investments instead of my tax bracket rate.

Own it longer.

[Anonymous]

Anonymous wrote:

Anonymous wrote:There was the big story this weekend that JK didn't pay anything in federal taxes. And there was a fight between those defending him for being smart and using the tax code to his advantage and those saying that those codes only help the rich.

I'm not rich. I'm barely making it. I make less than 100K. I'm a single parent. I have a fed job. What do I need to do to maximize how I do things so I'm not losing about a 1/3 of my salary to taxes every year. Help my Kushner my income.

Go.

Borrow a shitload of money and invest in property. Your tax savings will be the silver lining when you scramble every month to make your debt payments like Jared.

Isn't part of the point that you have to be able to borrow millions rather than hundreds of thousands so your lenders will do the scrambling to keep you afloat rather than you having to do so yourself?