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Updated over 1 year ago,
Offsetting W2 and capital gains by investing into real estate
I've been lurking around for quite some time and finally at a point to where I can make some major moves in real estate. Aside from capital gains that I have to offset this year, I am also now an W2 employee and fall into the 37% tax bracket.
From my conversations with my CPA and much research online, I have learned that I cannot offset my W2 income taxes with real estate unless it's short-term rentals, since I can't qualify as a real estate professional. However, on the flip side, I'm also noticing and reading that I'm able to offset my w2 income taxes from losses suffered by an LLC. I'm a little confused by this because it seems that I can offset w2 income with LLC losses, but not if it's through real estate investments other than STRs?
Anyone able to chime in on here? I've talked with my CPA and also just waiting on a response, but couldn't help myself but to post here and get some feedback as my head is spinning.
I'm essentially looking to make a big investment into qualified opportunity zones or STRs, depending on what helps offset my capital gains + w2 income.