Living in California and looking to invest in Nevada

[Michael Batshon]

Hi,

I am looking to purchase a couple rental properties in Nevada, living in California the taxes here are crazy and i want to pay as little as legally possible. If i bought a property in Nevada how would i go about paying very little taxes, is there a way to avoid paying California taxes for rental income coming from a no state income state?

[Terry Lao]

@Michael Batshon

If you bought rental property in say, Las Vegas, and live in Southern California, there is a good chance you will have a negative amount on your schedule E (rents/royalties). The main drivers of deduction will come from interest if loan, depreciation, mileage, repairs, maintenance, hoa, taxes, and insurance. You should be at net loss around 2-3k. You will have depreciation recapture when you sell, but that's down the road.

Terry