Big Tax Bill
 

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

Great article and I have to wonder why in the world would a couple making enough money from RMD's and investments that would create a larger tax bill for them, bother dodging the income taxes due. At most, they probably have 15 years left for their money to last and if their taxes would be that "hefty" there is plenty to live on for that period.

I feel some details must be missing.

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?

Bill not yet law so changes could take place

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?

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.

If you're just interested in trying to amass more wealth at your age, tell the crowd. You received some excellent information on older people maintaining rental property.

If you want to dodge paying taxes I'm sure someone here can help you. Be patient.

Why not take those RMDs you don't need and donate some or all of it to qualified charities. Then it is not taxed. You may of course consign this advice to the toilet also. Welcome to TOTV

What can I say but welcome to IRMAA, NIIT and AMT! Believe me, you will NOT come to love paying them.

Regarding owning a rental house...What I initially posted in good faith from Kiplinger pretty well sums it up. At age 83 I have been involved in the rental business for 75 years and dealt with thousands of tenants in houses, apartments, mobile home parks and the self storage business so I believe I may know a little something about it. My father had nine rental homes. I was the slave from an early age, child labor, cutting the grass, painting and cleaning up after tenants left. Even one rental house can become a nightmare if you get a bad tenant. Paying plumbers and electricians to make repairs when necessary is very expensive so a small landlord better be both capable of and enjoy such work. Is the OP prepared to get calls in the middle of the night because a tenant has locked himself/herself out? Being a landlord is a JOB!

BTW, what I did is move ALL my IRA funds to a Roth during a very, very low tax year for me, fortunately concurrently a year during which the market had plunged. Win, win!

I just finished being a landlord in the villages . the advice for taxes was to see a CPA who specializes in taxes, since you are so concerned with paying taxes. . This is a free web bbs, you get what you pay for. And not clearly being a someone with what experience? paying taxes? doing financial planning? managing trusts? filing all the different tax returns? yes, i do all those things. . but again, its just a web based bbs with free advice.

but its more perspective about taxes being a by product of success. . successful people pay taxes, and move on to get the financial planning they should have gotten to avoid the situation before it happened.

good luck

No one seems interested in answering your question?

If I'm not mistaken, if your MAGI is $150,000 or more, you can not deduct any Passive Activity Loss. The "phase out" begins at $100,000. Check with your accountant.

LOL. It sounds like the OP wants to buy a rental property to lose money, and then deduct the losses to reduce taxes.

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. .

IMHO, OP's 2nd post on TOTV is way too early to get that snarky