Real estate gain + W2

[Namal Burman]

We have 2 W2s( Me+ Spouse).Have a primary residence SFH and 2 rentals.I have around $40K of rental income after all the deductions/depreciation.This time I used a CPA and I am a sure he tried his best to get all deductions possible. Can you folks suggest what can I do to offset this real estate gain of $40K per year? Should I buy another property in San Diego? Since it won't be cash flow in this condition and may run into loss it may offset my rental income but hoping to build equity and have another investment in my portfolio.What would you folks suggest?

[Katie Balatbat]

@Namal Burman

Did you try asking your CPA for his suggestions in this regard?  He would probably be the first person to ask since he knows your personal situation better than anyone else here could.  Note that rental losses are traditionally only deductible against rental income; since you clearly have positive passive income, a loss-producing property likely would help reduce that income.  But then again, do you WANT a loss property?  You could ask your accountant about options for bonus depreciation or possibly updating the properties in order to receive depreciation deductions or write-offs for repairs, maintenance, etc.  But, there of course would be some cash outlay in order to purchase new capital assets or update the properties.

If you need referrals for any professionals in San Diego, send me a message.

*This post does not create an attorney-client or CPA-client relationship.  The information contained in this post is not to be relied upon.  Readers are advised to seek professional advice.