The Generational Wealth Formula

Launching a new business is exciting, but also overwhelming. To make it easier, we've created a practical checklist to guide you through the key startup steps, in the right order. Whether you're just brainstorming or already up and running, this guide ensures nothing important falls through the cracks.

The "Drop and Swap" strategy is a nuanced but powerful way to facilitate a 1031 exchange when partners in a real estate partnership disagree on whether to sell or exchange a property. This approach allows one or more partners to perform a 1031 exchange and defer taxes, while the others exit the investment and recognize gains.

Breakdown of the seven IRS tests for material participation, with practical examples for short-term and long-term rental investors.

Cost segregation is a powerful tax deferral strategy for real estate investors when used correctly. But if your primary activity is flipping houses or land, you may be wondering whether you can benefit from a cost segregation study.

Life insurance isn’t just about protecting your family in the event of your death. For wealthy individuals and savvy business owners, it can be a powerful financial planning tool and tax-efficient investment vehicle. While the middle class often buys inexpensive term life insurance with no cash benefit unless they pass away during the term, high-income earners and entrepreneurs usually choose permanent life insurance to build wealth, shelter income from taxes, and access funds without triggering taxable events.

Suppose your income is too high to qualify for a regular Roth IRA contribution. In that case, the Backdoor Roth strategy provides a legal workaround that enables you to fund a Roth account by first contributing to a Traditional IRA and then converting it. This guide walks you through exactly how to execute a Backdoor Roth, when it makes sense, and how to avoid the common pitfalls that can trigger unexpected taxes.

High-income earners in real estate face both exceptional tax-saving opportunities and increased scrutiny from the Internal Revenue Service (IRS). Whether you're generating six-figure profits from flips, building equity in long-term rentals, or deferring gains through 1031 exchanges, your tax strategy can significantly impact your after-tax wealth.

If you invest in real estate syndications, funds, or private partnerships, you’re likely receiving Schedule K-1s from limited partnership (LP) interests, often with sizable paper losses generated through depreciation or cost segregation.

Outlines which domestic and international travel costs are deductible depending on the business vs. personal nature of the trip.

RS Form 3115 is the tax code’s approved method for correcting prior-year depreciation errors and improper accounting methods, without filing multiple amended returns. Real estate investors often overlook bonus depreciation, cost segregation, or even claim no depreciation at all in the early years of ownership. If only one year has been filed using the incorrect method—such as a missed cost segregation or wrong depreciation—you may be able to amend the most recent return instead of filing Form 3115. Amending is generally easier, faster, and less expensive.

Applying for an EIN is a key step when starting a business, but it's easy to select the wrong entity type during the application process. If you’ve mistakenly classified your business (e.g., selected “Partnership” instead of “Single-Member LLC”), the IRS will expect different tax returns than you’re actually required to file.

When you upgrade or replace part of a rental property, such as a roof, HVAC system, or flooring, you may think you can only depreciate the new asset. But what about the old component you just threw away?

Outlines which domestic and international travel costs are deductible depending on the business vs. personal nature of the trip.

If you're self-employed or earning income through side gigs or flipping properties, you may be wondering if forming an S Corporation will help you save on taxes. S Corps can still be a powerful strategy, but only when your income hits the right threshold. This guide breaks down how self-employment tax works, how S Corporations reduce it, and how to know if the switch is worth the effort and cost.

Hiring your children through your business can create powerful tax savings and financial learning opportunities, but only if done correctly. With proper structuring, you can deduct wages, avoid payroll taxes, fund retirement accounts, and shift income into a lower tax bracket, all while staying compliant with child labor laws.

Prepares investors for the tax consequences of selling a depreciated property—and how to minimize the hit.

Federal and state incentives still offer valuable tax savings for energy-efficient upgrades in, but key credits are slated to expire by year-end. This guide explains how to take advantage of deductions like IRC §179D and credits like the Residential Clean Energy Credit before they vanish. It also highlights new rules, compliance tips, and planning strategies to protect your investments.

Home long-term care is a growing reality and expense for many families. Fortunately, the IRS allows deductions for medically necessary in-home care, provided certain conditions are met. This guide outlines when you can deduct care-related expenses, how to structure and document them properly, and advanced planning tips to reduce your tax burden.

Restricted Stock Units (RSUs) are a popular form of equity compensation offered by startups, tech firms, and large public companies. While they can build long-term wealth, RSUs come with complex tax implications that can catch high-income earners off guard.

Section 179 is a valuable tax tool that lets businesses deduct the full cost of qualifying assets in the year they are purchased and placed into service. Beginning in 2025, the deduction limit has been increased to $2.5 million, with a phase-out starting once purchases exceed $4 million. This change gives small and mid-sized businesses even more flexibility to immediately recover the cost of vehicles, equipment, and other eligible property. On top of that, bonus depreciation has been restored to 100% and made permanent, allowing businesses to deduct the entire cost of most new and used property without a dollar limit. This guide explains how Section 179 and bonus depreciation work, what assets qualify, and how to use both provisions together to maximize tax savings and improve cash flow.

As the year comes to a close, you have a limited window to implement strategic tax moves that can significantly lower your tax liability. Whether you're a real estate investor, business owner, or high-income earner, these last few weeks offer powerful tools to defer income, accelerate deductions, and reduce audit risk—while staying compliant.

Capital gains from selling stock, real estate, or businesses often result in substantial tax liabilities. Unlike business income, which can be reduced through deductions and expenses, capital gains require intentional tax planning.

Real estate is more than just an investment—it's a powerful tool for wealth building and tax strategy. Many investors are surprised to learn that they may be able to use losses from their rental properties to offset income from other sources, thereby reducing their tax bill significantly.

The Conservation Use Valuation Assessment (CUVA) program is a valuable tool for landowners who utilize their property for farming, timber production, or environmental conservation. By committing to maintain land in qualifying use for 10 years, participants benefit from reduced property tax assessments based on current use, rather than fair market value.

Self-employment (SE) taxes often catch new business owners and real estate professionals off guard. Unlike W-2 employees who split Medicare and Social Security taxes with their employers, self-employed individuals pay the full 15.3% SE tax on net profits.

If you're operating your business through an S-Corporation, C-Corp, Partnership, and even sch C, reimbursing yourself for business-related expenses the right way could mean big tax savings—and fewer headaches.

Selling your personal residence to your own S-Corporation can unlock powerful tax advantages, especially when the property has appreciated significantly, you don’t want to sell, and you want to convert it into a rental. While most taxpayers are aware of the $250,000 capital gain exclusion for single filers and $500,000 for married filing jointly under IRC §121, few understand how to combine this exclusion with S-Corporation planning to generate additional depreciation and long-term savings.

Most real estate investors and business owners chase non-passive tax planning strategies, aiming to qualify for Real Estate Professional Status (REPS) or exploit the Short-Term Rental (STR) loophole to convert real estate losses into offsets against W-2 wages or business income.

When selling real estate, most investors think of a 1031 exchange to defer taxes. But what if you’re not buying replacement property?

When selling real estate, most investors think of a 1031 exchange to defer taxes. But what if you’re not buying replacement property?

Filing an extension buys you time to file your tax return, not time to pay your tax. While often misunderstood, tax extensions are a powerful planning tool used by real estate investors, entrepreneurs, and high-income taxpayers to manage complexity, reduce audit risk, and maximize deductions.

Health Reimbursement Arrangements (HRAs) allow small business owners to legally deduct medical expenses, including premiums, copays, and prescriptions, by employing a spouse or using a standalone employer-funded plan. When appropriately structured, HRAs provide pre-tax reimbursements for medical expenses that would otherwise be non-deductible under IRS rules (e.g., those subject to the 7.5% AGI limitation on Schedule A). This guide explains how standalone HRAs and integrated HRAs function, outlines the qualification steps, and highlights the key compliance requirements.

S-Corporations (S-Corps) offer unique tax benefits, but they may not be the right choice for everyone. This guide explains when it makes sense to elect S-Corp status, how to structure one effectively, how much you can save on self-employment taxes, and what advanced planning strategies, such as converting a primary residence into an S-Corp asset, can unlock even more savings. If you’re a high-income 1099 earner, a gig worker, or planning to scale a non-passive business, this guide is your roadmap to doing it the smart way.

Bonus depreciation remains one of the most effective tools for reducing taxable income, particularly for real estate investors renovating short-term rentals (STRs) or commercial properties. One of the most strategic ways to leverage it is through Qualified Improvement Property (QIP) and capitalized improvements like landscaping.

Mediation, also called alternative dispute resolution, offers taxpayers a faster, more cost-effective, and collaborative way to resolve IRS disputes before they escalate to lengthy appeals or costly litigation. The IRS continues to encourage its use as a proactive option for taxpayers who want to settle issues at the earliest possible stage.

Short-term rentals (STRs), such as Airbnb and VRBO properties, offer one of the most powerful legal tax strategies available to real estate investors. Thanks to a unique loophole in the U.S. tax code, you can treat STR losses as non-passive, even if you don't qualify as a Real Estate Professional (REP).

This guide provides a practical IRS audit defense strategy for short-term rental owners facing scrutiny over income classification, expense deductions, and material participation. Drawing on a real-world case study, we show how proactive documentation, accurate reporting, and compliance with IRC §§ 469, 162, 167, and 195 can help reverse proposed IRS adjustments and preserve key tax benefits.

Self-employed individuals and business owners often ask whether they can deduct health insurance premiums. The answer is yes—but how you deduct these expenses varies based on your business structure. Whether you’re a sole proprietor, partner, or S-Corporation shareholder, specific rules under IRC Section 162(l) determine how to qualify for the self-employed health insurance deduction.

This guide provides a practical IRS audit defense strategy for short-term rental owners facing scrutiny over income classification, expense deductions, and material participation. Drawing on a real-world case study, we show how proactive documentation, accurate reporting, and compliance with IRC §§ 469, 162, 167, and 195 can help reverse proposed IRS adjustments and preserve key tax benefits.

A practical tax guide for owners on how to manage personal usage so that they don't lose tax benefit.

Download all our Tax Strategy Guides For Real Estate Investors, High-income Earners & Business Owners.

The Internal Revenue Code offers a range of General Business Credits (GBCs) designed to reward businesses that: Hire employees from targeted groups Invest in innovation and research Improve accessibility for individuals with disabilities Offer employee support programs such as child care or family leave Adopt clean energy or low-emission technologies When applied strategically, these credits can significantly reduce your tax liability while advancing compliance and operational goals. This guide outlines major credits available, eligibility requirements, and how to position your business to benefit.

Writing off a business-use vehicle can offer substantial tax savings—but only when done strategically. Self-employed individuals, gig workers, and business owners can deduct auto-related costs through Section 179, bonus depreciation, or the standard mileage rate. However, in some situations, it’s smarter to wait or use the mileage method instead. This guide covers eligibility, deductible expenses, vehicle classification rules, and timing strategies—updated for 2025 mileage rates, depreciation caps, and IRS compliance standards.

Understand how to document and track your hours to meet IRS material participation standards and unlock passive loss deductions.

Choosing the right entity structure is one of the most important early decisions for real estate investors, business owners, and entrepreneurs. Each type—whether a Single-Member LLC, Multi-Member LLC, S-Corporation, or C-Corporation—carries different tax obligations, legal protections, and planning implications.

The Dependent Care Tax Credit is a powerful yet often misunderstood tax benefit designed to reduce out-of-pocket expenses for child and dependent care costs for working parents and caregivers. Families can claim up to $1,200 in credits per year if they meet strict IRS qualifications.

If you receive a letter from the IRS, don’t panic—but don’t ignore it either. IRS mail typically relates to changes on your account, questions about your tax return, or payment requests. Whether it’s a notice about a correction, an audit, or a balance due, acting promptly can help you avoid penalties and resolve the issue quickly.

If you sell your home early—before living in it for two years—you may still qualify to exclude part of the gain from your taxes. This guide explains how the partial Section 121 exclusion works, including how life events like job changes, health issues, or unforeseen circumstances can allow for early relief. With the right understanding and records, you can reduce or eliminate capital gains even without meeting the full two-year rule.

Many real estate investors believe that cost segregation only makes sense if they qualify for Real Estate Professional Status (REPS) or the Short-Term Rental (STR) material participation loophole. While these pathways allow real estate losses to offset W-2 or business income, the strategy has significant value even if you don’t qualify under these rules.

The W-2 Income Offset Strategy leverages real estate losses to reduce taxable W-2 income, offering significant tax savings for investors. Typically, rental losses are passive and can only offset passive income. However, by utilizing specific IRS provisions like Real Estate Professional Status (REPS), the Short-Term Rental (STR) loophole, or advanced Limited Partnership (LP) grouping—investors can reclassify these losses as non-passive. This guide details how to implement this strategy in 2025, ensuring compliance and audit readiness.

Tax credits are one of the most powerful ways to reduce your tax liability—and in some cases, they can even generate a refund beyond what you paid. This guide breaks down key refundable and nonrefundable tax credits available in 2025 for individuals and families. From child-related benefits to clean energy, adoption, and education, we cover which credits apply, who qualifies, and how much you can save.

Tax credits available to individuals and families, including clean vehicle credits, education, and child-related incentives.

Investing in real estate outside your home state offers opportunities for cash flow, appreciation, and diversification, but it can also raise confusing tax questions: Do you pay taxes where the property is located, or in the state you live in? Can you avoid taxes by investing in states like Florida or Texas that don't impose income tax? In reality, both your state of residence and the property's location may have tax filing requirements. Each state applies its own rules regarding income sourcing and residency. Whether you're a first-time out-of-state investor or managing a growing multi-state portfolio, knowing how these rules work is essential to filing properly, avoiding double taxation, and planning future investments with confidence.

For real estate professionals (or even business owners), traditional advice on retirement savings often falls short of expectations. While Roth IRAs are celebrated for tax-free growth, going "Roth-first" ignores the massive tax-sheltering power of real estate losses. Instead, combining traditional retirement contributions with Roth conversions during loss years delivers a triple tax benefit and long-term wealth leverage.