There are several different types of income in the US tax code.Two main types are “active income” and “passive income".Active income is money you earn from working, such as wages from a W-2 job or income from running a business.Passive income is money you earn from investments like real estate, stocks, or rental income from your RE portfolio where you earn $ without actively working.Normally, you can't use passive losses (like losses from real estate investments) to offset active income like your salary from a W-2 job.That is unless you are an RE Pro.The reality is, that Real Estate Pro status is just a filing status similar to filing married or jointly.And if you are a real estate professional you CAN use passive real estate losses to offset active income from other sources.To qualify as an RE Pro you must:1.

Tax liens in MD are good for two years. 

If you use a DSCR loan you could maximize the equity you could take out while still breaking even on the mortgage + taxes + insurance.

You'll be able to defer a bunch of tax with this purchase. 

The only part that Property 1 pays on that loan is the escrow for property tax & insurance for Property 1.Thank you for your insight.You need to look at purchase price to determine cost basis, not how you financed the purchase.

I look for cashflow to service the debt, repairs, cap ex, taxes, and insurance while the equity grows, my taxes are decreased, and rents are increased to make more cashflow. 

Like your post title suggests, you die to avoid the taxes.

Day traders are not exempt unless they elect mark-to-market (MTM) accounting, which eliminates wash sale tracking but taxes gains as ordinary income.To manage taxes, track trades closely, avoid overlapping purchases, or consider MTM election if trading actively.

Most people do not know this is a legitimate way to fund your real estate deals and do it in a tax advantaged way.

As for income verification, I require the applicants two most recent paystubs and if self employed I need their most recent tax return.