Maximize Returns on Real Estate Investments

Real estate investment can be highly tax-efficient when structured correctly. Whether you own short-term rentals (Airbnb, VRBO), long-term rentals, commercial property, or a mixed portfolio, we work with your property managers and accountants to maximize deductions and minimize taxes. Our tax experts serve real estate investors throughout Austin, Taylor, Hutto, Pflugerville, Round Rock, and Georgetown.

Rental Property Tax Strategies

Owning rental property opens the door to deductions and deferral strategies that can dramatically lower what you owe each year. Here’s where we focus:

Depreciation Write-offs

Residential buildings depreciate over 27.5 years, creating a non-cash deduction that shields your rental income.

Mortgage Interest

Fully deductible on Schedule E, though principal payments are not.

Operating Expense Deductions

Repairs (not improvements), maintenance, insurance, property taxes, utilities, and HOA fees all count.

Passive Loss Planning

We manage losses strategically to capture the maximum deduction allowed under IRS rules.

1031 Exchanges

Trade one investment property for another and defer capital gains taxes indefinitely.

Cost Segregation Studies

Accelerate depreciation to front-load deductions and save tens of thousands.

Real Estate Tax FAQs

Yes. Mortgage interest is fully deductible on Schedule E. Principal payments are not. Interest is one of the largest deductions for landlords and significantly shields rental income from taxes.

Depreciation is a non-cash deduction. IRS assumes building loses value over 27.5 years (residential). You deduct portion annually. Example: $300k building = ~$10.9k depreciation yearly. Shields rental income from taxes without cash outlay.

Repairs, maintenance, insurance, property taxes, utilities, HOA fees, property management, advertising for tenants, legal/accounting fees, office supplies. Keep all receipts and document business purpose.

Repair maintains property (patch drywall). Improvement adds value or extends life (new roof). Repairs are deductible immediately; improvements are depreciated. The line is often gray. We classify correctly to maximize deductions.

You report rent as income only when received (cash basis). Vacancies mean no income reported, but expenses still deductible. Bad debt is not deductible unless you operate on accrual basis (rare for small landlords).

Rental losses can only offset passive income (generally). Non-real estate pro status limits deductions to $25,000 against W-2 income annually. Excess carries forward. Real estate pro status changes this rule significantly.

Swap one investment property for another and defer capital gains indefinitely. Strict rules: 45-day identification, 180-day close. Like-kind requirement. Timing is critical. We coordinate the exchange and ensure compliance.

Breaks building cost into components (fixtures, systems, landscaping) with shorter depreciation (5, 7, 15 years vs. 27.5). Accelerates deductions and saves tens of thousands. Best for new acquisitions or major renovations.

When you sell rental property, you pay 25% tax on prior depreciation deductions. This reduces long-term capital gains benefit. 1031 exchange postpones this tax indefinitely.

Some use separate LLCs for liability; others hold in one entity. Consider liability, lender preferences, state filing fees. Each property tracked separately regardless of entity structure.

Cost Segregation = BIG SAVINGS!

A cost segregation study breaks building cost into components depreciated over 5, 7, or 15 years instead of 27.5 years. Result: tens of thousands in accelerated deductions and taxes saved. Best for new acquisitions or major renovations.