W2 taxes are killing me

[Demjan Van Der Kach]

Hey folks,

Would really appreciate some ideas from the forum CPA's, tax lawyers. My wife and myself are having full time jobs and work 50-70 hrs a week each that puts us in 35% pus federal tax brackets. I really like real estate investing and made a decision to move from casual investor to the pro and make REI my second major activity besides the W2 job. I would like to acquire a bunch of properties and use depreciation aggressively with cost aggregation studies etc... but my CPA says there are passive activity loss rules where losses carry forward until the property is sold... Not good enough. What are the ways to function so I could use depreciation to offset my crazy tax bills from the w2 job? 750 hrs of activity in real estate? is it the only option? 750 hrs is almost 20 weeks of full time job... :( I guess, for the love of real estate investing, I can work additional 3 hrs a day (21 hrs a week) which is going to put me on the crazy schedule first 2-5 years and later scale down on my w2 job when business is more established. How many hours would be judged reasonable by IRS to use the depreciation against my W2 income? Again, I appreciate your comments, advice. PM me if you prefer so. Love the forum! Thanks.

[Jon Crosby]

@Demjan Van Der Kach 

I'm not an CPA or tax attorney.  But there is an old saying..'don't let the tax tail wag the dog'. 

Focus on acquiring successful, cash flowing properties, providing quality housing for your tenants or guests and THEN focus on maximizing your tax benefits.  Real estate investing should be about releasing you from the shackles of your W2 job, not tightening them.

Best of luck