Rental losses are good for you!

Yes embrace losing on your rental properties! I know you’re rubbing your eyes, wondering if you’re reading this right, but let me clarify.

I would like you to take advantage of rental losses resulting from DEPRECIATION. Depreciation is a NON-CASH outflow expense representing how much an asset loses value over time. Let’s assume your income before depreciation is $5,000 and after depreciation you have a loss of $10,000. Because depreciation is NON-CASH, you did not really spend the money and in fact you could use the resulting “loss” to offset other income and ultimately reduce your tax burden.

By performing a cost segregation study on your properties, you could even further accelerate depreciation and incur larger losses that could help offset your high W2 income.

Do not wait until it’s time to file your taxes! Discuss with your tax professional ahead of time how you can plan for the future. We are here to help with your tax planning! Schedule an appointment at www.lobecpa.com.