Imagine making millions of dollars over the course of your career and then having to pay 30-50% every year to uncle sam instead of compounding that cash over time.This is exactly what real estate professionals have learned to mitigate.To reduce their taxable income, they just buy a building every year, do a cost seg, and use depreciation to reduce their tax liability dramatically.Their personal wealth snowball grows much larger and much faster than their W2 counterparts who give most of their money back to the government each year.Following this strategy as a real estate professional is one of best ways to end up with a much larger net worth at the end of your career.

This 1031 Exchange Calculator can help you model out the taxable proceeds based on various situations. 

I also suspect inflation will drive continued migration to lower cost of living / lower tax states.  

Diversification into multifamily also lowers risk compared to a single rental, as vacancies won’t affect your income as drastically.3.

Maintain detailed records to substantiate deductions for materials, labor, and expenses, which can significantly reduce taxable income.While an S-Corp provides tax savings, it also requires payroll management and compliance with formalities, making it essential to stay organized or consult a tax professional for ongoing compliance.This post does not create a CPA-Client relationship.

Rent payments from the medical LLC are fully deductible as a business expense, while the property-owning LLC will report the rent as taxable income, which can be offset by deductions for expenses like mortgage interest, property taxes, maintenance, and depreciation.To ensure compliance, document how FMV was determined—using market comparisons, an appraisal, or similar data—and draft a formal lease agreement outlining the terms, rent amount, and responsibilities.

To transition to multi-family properties, research landlord-friendly states like Texas, Florida, Tennessee, and Indiana with favorable eviction laws, lower taxes, and higher rental demand.

In the midwest, prices are lower.  

I know that the west coast has lower cash flow with the higher prices, but seems like you are in a good spot if you can maintain that average.My state doesn't have state income taxes, what a blessing! 

Gains are taxable.