5 Tax Strategies Every Real Estate Investor Should Know

Taxes are often the biggest expense for W2 professionals. Here are five strategies that can change that.

1. Depreciation

The IRS allows you to deduct the cost of your property over time, creating paper losses that offset your income.

This accelerates depreciation by reclassifying certain components of your property into shorter depreciation schedules.

If you or your spouse qualifies as a real estate professional, you can use real estate losses to offset W2 income without limitation.

Swap one investment property for another while deferring capital gains taxes indefinitely.

Invest capital gains into designated opportunity zones and potentially eliminate taxes on the new investment's appreciation.

Each of these strategies is powerful on its own. Combined, they can transform your tax situation.