This document provides an overview of tax planning strategies for real estate professionals. It discusses the importance of knowing the "3 D's" of tax planning: deferring taxes, deducting expenses, and dividing income across multiple entities. Specific strategies covered include using opportunity zones, 1031 exchanges, retirement plans, depreciation methods like cost segregation, the 20% QBID deduction, and income shifting. The document also reviews entity selection, home office rules, business use of vehicles, travel expenses, self-directed IRAs, hiring family members, and starting a 501(c)(3) organization.

1. Samy Basta, CPA
Tax planning: The Big 3 Ds
for Real Estate Professionals
www.realestatecpapro.com
sbasta@unsfgroup.com

2. Tax saving
strategies
Know your 3 D’s
- Defer
- Deduct
- Divide

3. Review
business
entity
structures
- Entity Selection
- Use multiple entities
- Avoid sole
proprietorship

4. Type of
Entities
- - Sole Proprietorship
- - LLC
- - S corp / Partnership
- - C corp
- - 501 C(3)

5. IRS 2017 Data
Book

6. Create Ways
to defer a Tax
Bill

7. Opportunity
Zone
- How it works?
- - Timetable (5, 7, 10 years)
- - Substantial Improvement
- - Deadline – Dec, 2019

8. Opportunity
Zone vs.
1031X
- Investment options (RE vs.
Any capital gain)
- - Timetable
- - Amount to invest
- - OZ expire 2026

9. Examine your
retirement
plan
- Types of Retirement
Plans
- How to set up one
- Tax benefits

10. What is DST?
1. Can mean to two different
things:
2. - Delaware Statutory Trust
(1031X)
3. - Deferred Sale Trust (Sell in
exchange of Promissory note
or installment agreement)

11. Create Ways
to Maximize
your
Deductions

12. 14-Day Rent
Rule
- - Rent no more than
14 days AND
- AND
- Use the house
yourself 14 days or
more
- - Keep flawless
records of rental
periods

13. Real Estate
Professional
- More than 750 hr in Trade
- - 500 hr participation
- - No passive loss limitation

14. Cost
Segregation
- Based engineering study
- Accelerate depreciation
- Passive rules limitations -
professional RE is a winner

15. Section 199A
Deduction |
Tax Savings for
Businesses
- Understand the rules
- “Specified service”
Limitation
- How to get the 20%
QBID?

16. Solar Credit
(renewable
energy)
- Residential &
Commercial
- 30% - Expire by 2021
- Indefinite Carryover

17. Tax Rules for
Business Use
of
Automobiles
- Own or lease
- Actual exp vs. standard
mileage ( 58 C / mile)
- Should I buy a car
under my name or
business name?

18. Business
Travel
- - The 50% golden rule
- - Travel by plane, train, bus
or car
- - Use the Trip Primarily for
Business Purposes

19. Income
Shifting
Strategies

20. Self-Directed
IRA Real
Estate
• - Traditional IRA, VS Solo
401K
• - UBIT & UDFI Cautions
• - Things to consider
(prohibited list)

21. Use Multiple
Entities
- Holding Co Vs.
Management Co.
- Series LLC’s
- Out of State Entities

22. Hire your
children to
work for you
- Tax Rules For Hiring
Children In The
Family Business
- Minimize payroll tax
exp
- Early retirement
saving for your Kids
through ROTH

23. Start a
501(c)(3)
Organization
- Example (W. Buffett,
Clinton, Gate, Trump)
- Medical research, homes
for elderly, disabled, low
income
- Give cash or property -
(30% - 60%) tax deduction