How Real Estate Investors Can Maximize Their Tax Benefits w/Amanda Han & Matt MacFarland
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Episode Description
Welcome to the Freedom Point Real Estate podcast! Today's guests, Amanda Han and Matt MacFarland, share their wealth of knowledge on all things real estate investors and their taxes; they cover tax planning, tax strategies, tax savings, tax mistakes, and more.
Amanda Han & Matt MacFarland are CPAs and tax strategists who specialize in helping people use real estate to save massive amounts in taxes and keep their hard earned money. They help educate investors on how to maximize tax write-offs, legal entity strategies, tax-efficient ways to access profit, how to use 401K money for real estate, and much more. They are authors of the highly rated book Tax Strategies for the Savvy Real Estate Investor and they have been featured in prominent publications including the Forbes Finance Council, Money Magazine, Talks at Google, CNBC’s Smart Money Talk Radio as well as the BiggerPockets podcasts. Today, Amanda & Matt have helped thousands of investors nationwide to save on taxes with proactive tax planning.
CONNECT WITH AMANDA HAN & MATT MACFARLAND!
Website: https://www.keystonecpa.com/
Youtube: https://www.youtube.com/channel/UCvL8-Sq9NtVbh_SO6oDmmAg/featured
Matt LinkedIn: https://www.linkedin.com/in/mattmacfarland/
Amanda LinkedIn: https://www.linkedin.com/in/amandayhan/
Amanda Instagram: https://www.instagram.com/amanda_han_cpa/
Amanda Facebook: https://www.facebook.com/amanda.han.71
Amanda Twitter: https://twitter.com/i/flow/login?redirect_after_login=%2FAmandaHanCPA
Amanda TikTok: https://www.tiktok.com/@amandahancpa
CONNECT WITH JEREMY DYER!
Website: https://startingpointcapital.com/
Instagram: https://www.instagram.com/startingpointcapital/
LinkedIn: https://www.linkedin.com/in/jeremydyer
Facebook: https://www.facebook.com/startingpointcapital
Book a Call! https://calendly.com/startingpointcapital/discuss-investing-with-jeremy-dyer?month=2023-12
Summary
Tip #1: Understanding Passive Real Estate Investing
Passive investing in real estate offers significant tax advantages, allowing investors to leverage depreciation losses to offset passive gains. Amanda and Matt emphasize the importance of recognizing the benefits of passive investing, especially in syndication deals, where depreciation can shelter distributions from taxes. As Matt explains, "A lot of time, that depreciation is sheltering the taxes they would otherwise pay on those distributions."
Tip #2: Qualifying as a Real Estate Professional
To fully leverage passive losses, investors can aim to qualify as real estate professionals, meeting specific criteria such as spending at least 750 hours per year in real estate activities and exceeding time spent in other jobs. Amanda and Matt highlight the importance of documentation and material participation requirements, emphasizing that real estate professional status can unlock substantial tax benefits.
Tip #3: Passive Losses and Future Benefits
Passive losses from real estate investments can be carried forward indefinitely, providing future opportunities to offset passive gains or other income sources. Whether through syndication deals or rental properties, investors can strategically utilize these losses over time, ensuring tax efficiency and maximizing returns. Matt illustrates, "You never lose [the losses]; there's always a benefit, it's just a matter of timing."
Tip #4: Lazy 1031 Exchanges for Passive Investors
For passive investors seeking tax efficiency without the complexities of traditional 1031 exchanges, a "lazy 1031" approach offers a viable alternative. By reinvesting proceeds from property sales into syndication deals, investors can offset capital gains with passive losses, simplifying the process and minimizing tax liabilities. Amanda emphasizes the flexibility of this strategy, stating, "It's always a win scenario... it's just a matter of timing."
Tip #5: Leveraging Retirement Accounts for Real Estate Investing
Self-directed IRAs and 401(k)s provide avenues for investors to diversify into real estate, offering greater control and potential for higher returns. By rolling over funds from old employer 401(k)s into self-directed accounts, investors can unlock opportunities for active or passive real estate investments, aligning their retirement savings with their investment goals.
Tip #6: Seeking Professional Guidance
While real estate offers significant tax benefits, investors can explore broader tax-saving strategies, such as income shifting and legal entity optimization. Diane Kennedy's book, "Tax Loopholes of the Rich," offers valuable insights into wealth-building approaches that encompass various asset classes, providing a holistic view of tax planning.
Tip #7: Navigating Real Estate in 2024
Navigating complex tax laws requires expertise and guidance from professionals like Amanda and Matt. Their book, "Tax Strategies for the Savvy Real Estate Investor," distills tax-saving strategies into practical insights and client stories, empowering investors to make informed decisions and optimize their tax efficiency.
Tip #8: Focusing on Long-Term Wealth Building:
By focusing on long-term wealth-building goals and understanding the synergies between tax planning and asset protection, investors can create sustainable financial strategies. Amanda and Matt emphasize the importance of aligning investments with personal objectives, whether through real estate, retirement accounts, or other wealth-building avenues.
Tip #9: Continuous Learning and Adaptation
Staying informed about changes in tax laws and investment opportunities is crucial for maximizing tax benefits and financial outcomes. Amanda and Matt highlight the need for ongoing education and adaptability, enabling investors to capitalize on new opportunities and navigate evolving tax landscapes effectively.
Tip #10: Balancing Work and Personal Life
Achieving a balance between work commitments and personal life is essential for long-term success and fulfillment. Amanda and Matt prioritize spending time with their family while continuing to grow their business, demonstrating the importance of work-life balance in achieving both professional and personal goals.
