So when’s the housing bubble bursting?
- Thread starter Dr. Truth
- Start date
According to 2022 tax records viewed by Business Insider, Michael's income was $300,106, and Eileen's was $122,403, for a total of $422,509. The bonus deductions they claimed on both properties meant they only reported a total taxable income of $6,341, reducing their taxable income by 98.5% and, in turn, letting them owe just $633 in federal income taxes. Michael received a tax refund for what was withheld. These deductions did not impact their state and self-employment taxes.
The main one is through the short-term rental tax loophole (STR loophole). Simply put, when purchasing a property, it must be intended to be used as a short-term rental. This allows the owner to claim it as a business rather than a source of passive income.
The second requirement is to materially participate in managing the property. Michael noted that most of the required hours could come from administrative duties such as managing guest check-ins and check-outs, scheduling cleaners, setting up furniture, taking pictures, and making repairs. You'll need to keep a spreadsheet that tracks those hours and proof that you did those tasks. While the participation rules can be met remotely, it's easier if the property is physically near you, allowing you to take on some tasks such as repairs, he added.
But Ford emphasized that if you're remote and using a third-party property management company and you happen to get audited, that will be a red flag for the IRS. This is especially the case if you own a single property. On the other hand, if you own many short-term rentals, then that's a different story. It would be impossible to manage them all directly. On that basis, if you put in more than 500 hours managing your properties, you would meet the participation test even if you hired other people who exceeded your hours, he noted.
A W-2 employee who used real estate to reduce federal taxes on his $300,000 salary by 99% explains how to pick the right property to qualify for the tax loophole and maximize deductions
One step is to locate public property records show the portion that can be used for deductions.
web.archive.org
According to 2022 tax records viewed by Business Insider, Michael's income was $300,106, and Eileen's was $122,403, for a total of $422,509. The bonus deductions they claimed on both properties meant they only reported a total taxable income of $6,341, reducing their taxable income by 98.5% and, in turn, letting them owe just $633 in federal income taxes. Michael received a tax refund for what was withheld. These deductions did not impact their state and self-employment taxes.
The main one is through the short-term rental tax loophole (STR loophole). Simply put, when purchasing a property, it must be intended to be used as a short-term rental. This allows the owner to claim it as a business rather than a source of passive income.
The second requirement is to materially participate in managing the property. Michael noted that most of the required hours could come from administrative duties such as managing guest check-ins and check-outs, scheduling cleaners, setting up furniture, taking pictures, and making repairs. You'll need to keep a spreadsheet that tracks those hours and proof that you did those tasks. While the participation rules can be met remotely, it's easier if the property is physically near you, allowing you to take on some tasks such as repairs, he added.
But Ford emphasized that if you're remote and using a third-party property management company and you happen to get audited, that will be a red flag for the IRS. This is especially the case if you own a single property. On the other hand, if you own many short-term rentals, then that's a different story. It would be impossible to manage them all directly. On that basis, if you put in more than 500 hours managing your properties, you would meet the participation test even if you hired other people who exceeded your hours, he noted.
A W-2 employee who used real estate to reduce federal taxes on his $300,000 salary by 99% explains how to pick the right property to qualify for the tax loophole and maximize deductions
One step is to locate public property records show the portion that can be used for deductions.
Wow
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3 Corporations Own 19,000 Metro Atlanta Homes
What does that mean for the housing market?
What does that mean for the housing market?
Atlanta monthly mortgage payments up nearly 113% since 2020, Zillow says
ATLANTA — Real estate company Zillow’s latest report on home affordability in Atlanta shows the costs for a monthly mortgage, and how much you need to earn to live comfortably, have both gone up dramatically since 2020.On Thursday, Zillow reported Atlanta homebuyers need to earn almost double what they needed in 2020 to buy a house and afford it comfortably, or spend no more than 30% of a household’s income on a house with a 10% down payment.
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In 2020, Atlantans who were looking to buy a house could get away with earning about $59,441 to afford a typical monthly mortgage, the real estate company said.
In 2024, Atlanta residents need to earn more than 94% more to achieve the same goal.
“Atlanta home shoppers today need to make $115,430 to comfortably afford a typical home,” Zillow said.
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Assuming they’ll make that proportional down payment, prospective Atlanta home buyers face an even sharper increase on potential monthly mortgage payments, compared to 2020.
Zillow’s latest data report showed “a monthly mortgage payment on a typical Atlanta home has risen sharply since January 2020, up 112.7% to $2,364,″ if you’re making that 10% down payment.
Home prices weren’t the only real estate trend to surge upward since 2020. Rental prices nationally were up close to 30% since pre-pandemic, according to Zillow.
In Atlanta, Zillow reported people living in the city needed to earn at least $76,000 to afford market-rate rent. According to the company’s observed rent index, the typical rent per month as of January 2024 was $1,900, a 0.3% increase year over year.
However, the same measure in January 2020 was $1,493, according to archival data available from Zillow. From 2020 to 2024, rent prices increased more than 20%.
From the comments section:Freddie Mercury’s Former London Mansion Can Be Yours for $38 Million
The late Queen frontman's former residence, located in Kensington, has been looked after for the last 30 years by his longtime friend Mary Austin.
