Offsetting W2 Taxes with Real Estate Investment - 2024 Strategy & Filling

[Hitanshu Shah]

Hi All 

We have two properties under seperate LLCs in MO. One is a 4-Plex under a 2 member LLC (My wife and myself) which we closed in Jul 2024. Other is SFR under a single member LLC (my wife) which we closed on 5 years ago. We also have W2 Incomes. We are looking for a CPA who is well versed with Real Estate Tax Laws and Strategy that can help offset our W2 Taxes with our investments and can also file our 2024 Taxes. Thanks

[Michael Plaks]

@Hitanshu Shah

I'm sure you will find some volunteers promising to know tax secrets (but unable to  deliver them later). And soon this thread will be full of enthusiastic statements and discussions of cost segregation, retirement plans and whatnot. So, before the cheerleaders come, let me give it to you straight.

If all of the below is true in your case:
- Both of you have full-time (40 hrs) W2 jobs
- Your jobs are not in real estate companies where you are a part-owner
- Your combined income is above $150k
- Your properties have long-term tenants (as opposed to AirBnBs)
- You have no other real estate businesses
then you CANNOT offset your W2 incomes with your rentals. 

All of those juicy hypothetical benefits are out of reach to you. You will need to change one of the above factors in order to unlock these benefits: invest in something different like STRs, quit your job and become a real estate agent instead etc.

And now let me leave before the party starts. The "sure, you can save many thousands with a smart strategic CPA" battalion is on the way already. Open the door. They are going to tell you what you want to hear. The sad fact that it won't work for you is a minor inconvenience.