Strategies to reduce taxable income while deploying capital to build wealth?

[Luis Arguello]

I manage 150 units across 30 properties in Miami. I work for a single owner. We are projecting to pay taxes on $1,500,000 for this year and $2,400,000 next year. That about $500,000 in taxes this year and $800,000 next year. I wanted to get the opinion of others on what the best strategy is to deploy capital back into the properties to in order to reduce our taxable income while also continuing to build wealth. Any input would be greatly appreciated.

[Benjamin Weinhart]

Hi Luis, you have a very interesting problem. We can give suggestions here, but you're at the point where it is 1,000% worth it to schedule a planning meeting with a professional. They may only charge a few hundred or few thousand depending on how involved it is whereas you could save multiple orders of magnitude of what they charge in savings/deferrals. They'd be able to give a lot more personalized advice versus what you might find on public forums such as these.

That being said, there's a variety of strategies you might be able to employ. It kind of depends on what your goals are, but you may be able to start consolidating your properties a little more with like-kind exchanges and/or purchasing larger properties where you could do cost-segregations on. Assuming you don't want to create additional management work for yourself, it's possible that higher value properties may give you the advantage of the higher capital outlay without additional work. The drawback of course is that you may be looking at smaller returns %-wise. Depends of course on how the deals work out.