[rjm1cc]

The answer is not to take on rental property to cut your taxes. Remember your tax deduction relates to money you spent on the property.

[coralway]

I would not take financial advice from anyone on any open forum - talk to a lawyer or CPA.

[GWilliams]

Originally Posted by retiredguy123

I don't get it. If you anticipate losses on your rental property, what good does it do to deduct them? Why not just pay the taxes on the RMD distribution?

It is a paper loss

[GWilliams]

Originally Posted by CoachKandSportsguy

So you have to pay taxes? we all do, its part of having successfully saved and invested.
Should you have done some ROTH rollover contributions? maybe, but why don't you actually go see a CPA about tax planning first.A CPA will set you straight on tax planning, as that is their primary specialty.

On the other hand, after taxes, what are you going to do with all the additional income? Any trips you want to take? Buy a boat?
Any gifts to family, helping them out? do you want to upgrade your house? Maybe move to a bigger house for a bigger tax deduction?

Taxes are the least of your problems though, in reality. . just a payment at withdrawal. .

good luck

You can always save the additional income and invest it for more income, maybe invest in tax free bonds, or stocks with qualified dividends?

With RMD their income will increase and the IRMAA will cost them extra premiums for Medicare for the same service as others. Why pay more for the same service?

[GWilliams]

Originally Posted by CoachKandSportsguy

LOL! lose the same amount of money are paying taxes, WIN - WIN, except you still have the same amount of after tax cash flow, and ALOTmore paperwork and headaches. .

Better to pay yourself than the government.

[Bwanajim]

I've owned rental properties and it could be a royal pain in the ass. One bad tenant could trashed the place and it's almost impossible to get them out. You don't need the aggravation at this point in life.

[BrianL99]

Originally Posted by djmdawson

Hmm. Appreciate the info but must admit, not much help saying "pay your taxes" and suck it up cause you have 15 years left on earth anyways. Not really answering anything and not clearly from someone with experience, so I will put this "rarified" non-advice where it belongs, in the toilet.

I think that's a wise decision.

The majority of the advice in this thread is shockingly naive, incomplete, erroneous and just plain dumb.

'You'll have to pay taxes when you sell, if you make a profit"? Wow, shocking news.

"You'll pay high taxes when you sell real estate"? Yeah, about 65% lower taxes than other income.

"Give it to charity"? Not much different than giving it to the IRS, it's still gone.

I won't even get started on some of the nonsense regarding heirs. (Under almost all circumstance, your heirs will inherit at "current market value", regardless of how much you've depreciated the property.)

Don't be tempted to pull the advice in this thread, out of where you put it ... let it stay there.

[Aces4]

Originally Posted by djmdawson

Hmm. Appreciate the info but must admit, not much help saying "pay your taxes" and suck it up cause you have 15 years left on earth anyways. Not really answering anything and not clearly from someone with experience, so I will put this "rarified" non-advice where it belongs, in the toilet.

Did you ever consider the answers came from people WITH experience who realize how quickly this part of your life will pass you by and what you want to buy into at your age, been there.. done that.

Also, you are asking a question which you should be asking pros because we all have different experiences, results, realities and goals in life.

[BrianL99]

Originally Posted by djmdawson

Need info on new BBB in congress from Trump. Wife and I are in the 70's. This is the first year of both getting RMD's and this will push income up big time.

Is there any benefit of owning a 2nd rental home from a tax perspective and what are the tax limits for eliminating the potential savings. IE, what is the income limit when you do not get to deduct losses?

I plan on using Turbo Tax or a tax guy but want the experience from someone who has a 2nd rental home.

DJ

Originally Posted by Aces4

Did you ever consider the answers came from people WITH experience who realize how quickly this part of your life will pass you by and what you want to buy into at your age, been there.. done that.

Also, you are asking a question which you should be asking pros because we all have different experiences, results, realities and goals in life.

Perhaps because those questions were NOT asked by the OP.

Read his Post. He asked about "tax consequences" of owning a rental home.

He didn't ask about folk's experience owning rental property or how it affected their life.

He didn't ask if others thought it was a good or bad idea to become a landlord.

He didn't ask about anyone else's experience as a landlord.

He didn't ask for investment advice.

He asked a simple, straight-forward question about the tax consequences of buying a rental property.

Instead of providing answers, most everyone who responded, made up their own question and then provided their answer to it.

No wonder people get frustrated with Discussion Boards and social media of this type ... everyone is an expert, but no one takes the time to read the question that was asked ... they make up their own question.

[retiredguy123]

Originally Posted by BrianL99

Perhaps because those questions were NOT asked by the OP.

Read his Post. He asked about "tax consequences" of owning a rental home.

He didn't ask about folk's experience owning rental property or how it affected their life.

He didn't ask if others thought it was a good or bad idea to become a landlord.

He didn't ask about anyone else's experience as a landlord.

He didn't ask for investment advice.

He asked a simple, straight-forward question about the tax consequences of buying a rental property.

Instead of providing answers, most everyone who responded, made up their own question and then provided their answer to it.

No wonder people get frustrated with Discussion Boards and social media of this type ... everyone is an expert, but no one takes the time to read the question that was asked ... they make up their own question.

I have to disagree with your post. The OP said that he wants the experience from someone who has a rental home. You don't need to own a rental home to answer a tax question. All you need is Google, AI, or to go to the IRS website. I agree that the OP didn't specifically ask a rental home question, but he definitely invited posters to share their experiences as a landlord. And that is what many posters did.

[CoachKandSportsguy]

Originally Posted by GWilliams

With RMD their income will increase and the IRMAA will cost them extra premiums for Medicare for the same service as others. Why pay more for the same service?

Not disputing that, nor the tax consequences. Not disagreeing at all.

First, to wake up one day and say, "Oh NO, I have RMDs and a big tax bill coming" means that you you haven't done any financial planning to minimize the taxes, and so at the last minute, you don't have alot of options.

Second, to then want to invest in real estate as a landlord, with apparently no experience, just for the income deduction for passive losses, which comes primarily from the larger portion of depreciation, that is a risky venture.

Why? because there is alot of work, especially people as they get older, and there can be "high risk" tenants, which may cost you more in cash than in passive loss write offs. . .

So the answer is to figure out how much to convert to a ROTH or just cash out of the IRA, and pay a one time tax, albeit at the higher incremental rate, and then you don't have to worry about IRMMA, and NIT, etc. . but you still have to pay taxes to avoid the future taxes.

So if you do the math, as a married couple just collecting SS at the max amount, one doesn't have to worry about IRMMA NIT, etc unless your IRA is greater than about $3 M, based upon the current 2024 tax schedules, and growth and withdrawal rates

So is someone just waking up to the RMDs, and panicking unnecessarily because one hasn't done the financial planning out 20 years by year? although he may have to pay increased taxes, but not increased increased taxes?

See a tax professional to do some basic financial planning. . . and yes, capital gains tax may be lower than one's income tax rate, or it may be higher, uncertain for now

[BrianL99]

Originally Posted by CoachKandSportsguy

See a tax professional to do some basic financial planning. . . and yes, capital gains tax may be lower than one's income tax rate, or it may be higher, uncertain for now

I know you know this Coach, but the Long Term Capital Gains Tax Rate is lower than the Ordinary Income Tax Rate on income above $47,151. Effective Tax Rate is a more complicated question, but the basic rate on LTCG is going to be lower.

Again, the OP's question wasn't related to lifestyle choices, management questions or anything of the like ... he was asking about passive investment losses, as it relates to a rental property.

[Kelevision]

Originally Posted by djmdawson

Hmm. Appreciate the info but must admit, not much help saying "pay your taxes" and suck it up cause you have 15 years left on earth anyways. Not really answering anything and not clearly from someone with experience, so I will put this "rarified" non-advice where it belongs, in the toilet.

With the exception of a small group, that’s ALWAYS the advice you’ll get on this forum. I stopped asking advice here long ago. Ask AI. Much smarter than TOTV. Sadly, I’m serious. Remember, You’re asking the same age or older and they don’t know the answer either.

[BrianL99]

Originally Posted by Kelevision

With the exception of a small group, that’s ALWAYS the advice you’ll get on this forum. I stopped asking advice here long ago. Ask AI. Much smarter than TOTV. Sadly, I’m serious. Remember, You’re asking the same age or older and they don’t know the answer either.

Social Media post of the month.

[Cliff Fr]

Originally Posted by djmdawson

Need info on new BBB in congress from Trump. Wife and I are in the 70's. This is the first year of both getting RMD's and this will push income up big time.

Is there any benefit of owning a 2nd rental home from a tax perspective and what are the tax limits for eliminating the potential savings. IE, what is the income limit when you do not get to deduct losses?

I plan on using Turbo Tax or a tax guy but want the experience from someone who has a 2nd rental home.

DJ

Consider yourself fortunate if you have enough money coming in to cause you to have to have to pay taxes. The vast majority of people will not have that issue.