Non Grantor Trust/Foundation to limit capital gains on RE

[Christina N.]

After completing my taxes this year for my 2 rentals (just purchased last year), I have capitals gains that are affecting my taxes with my husband and our W2 jobs. We have a long term amd short term rental in a LLC in Idaho while living in Ca. We make over 300k together without the properties. We talked to a tax specialist that stated the best way to structure our properties on these capital gains is to put our properties in non-grantor trust and create a foundation. By putting the captial gains in a foundation and donating 5% to a charity, we would eliminate the pass through income gains. My husband and I are trying to find the best way to structure our properties as well as research this strategy so we can continue to puchase more properties in the future. I am having a difficult time finding more information about this since it is pretty complicated. Has anyone heard of this or know of anyone we could talk to for a second opinion?

[Don Spafford]

@Christina N. I have not heard of that. I can put you in contact with an Idaho attorney if you would like. You have high earned income so you need to find a way to offset that tax liability. One thing I do suggest is that you may want to look into investing in a syndication. That way it is completely passive income AND in most cases sponsors will do a cost segregation study to get accelerated depreciation in year one. How much that can be will vary by asset class and by property. I can share with you that I invest in RV Campgrounds which produce high cash flows but also potentially huge tax benefits from depreciation. Much higher than most other investments I've seen. I think I can share that one property I invested in last year, provided a 222% depreciation that I can use to offset my income. I will be happy to share more with you directly if you are interested in learning more. Feel free to send me a DM and we can schedule a call.