Episode 64. How a Real Estate Investing Anesthesiologist Could Unlock $509,000 in Potential Tax Deductions
Episode Description
In this podcast, I sit down with a medical practice owner and review his tax situation.
As I went through his tax return, I identified several tax strategies worth looking at.
When I added them together, I found approximately $509,000 in potential tax deductions.
That does not mean he automatically saves $509,000 in taxes.
It means these strategies could potentially reduce his taxable income by that amount.
The first strategy I found involved real estate.
He owned real estate inside an S corporation, which raised an important tax planning issue.
I explain why I generally prefer keeping investment real estate separate from an S corporation.
Then I walk through cost segregation and how it can accelerate depreciation on qualifying properties.
In his situation, I estimated that cost segregation could potentially create $60,000 to $80,000 in additional deductions.
I also explain how short-term rentals can create different tax opportunities than traditional rental properties.
We then discuss the Augusta Rule, which can allow qualifying business owners to rent their home to their business for up to 14 days.
Finally, I explain an oil and gas tax strategy involving intangible drilling costs.
When I combined the strategies we discussed, the potential deductions reached approximately $509,000.
The important lesson is simple.
Your tax return tells you what happened.
Tax planning helps you decide what to do before the year ends.
That is why proactive tax planning is so important for doctors and other high-income business owners.
If you wait until tax season, many tax strategies may already be off the table.
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*Disclaimer This material & presentation content is for informational and educational purposes only. This material and presentation content is designed to provide general information regarding the subject matter covered. It is not intended to serve as legal, tax, or other financial advice related to individual situations. Because each individual’s legal, tax, and financial situation is different, specific advice should be tailored to the particular circumstances. For this reason, you are advised to consult with your attorney, accountant, tax preparer, and/or other advisor regarding your specific situation or your client’s specific situation. The information and all accompanying material are for your use and convenience only.