Investing in real estate through passive investments such as syndications or crowdfunding can offer certain tax benefits like depreciation, which can offset the taxable income generated from the investment.However, it's important to note that real estate investments can also be subject to various taxes, including property taxes and capital gains taxes, so it's crucial to consider all the tax implications when making investment decisions.In terms of passive investment options, real estate investment trusts (REITs) may be another option to consider.

I've heard that debt-financed real estate investment income from rents and disposition are NOT considered UBTI and, hence not taxable, and I've heard debt-financed real estate income is considered UBTI and that a form 990-T must be filled out to report these.

@Steve SandersonWhat some tax practioners, including taxpayers who do their own return, make the mistake is they classify the loss from sale of a rental asset as a capital loss instead of an ordinary loss.The difference is capital losses are limited to $3,000 per year with the rest carried forward indefinitely.Ordinary losses can be fully utilized in year of disposition.Imagine a taxpayer who is $250,000 of W-2 income and the difference in taxable income when classifying a $100,000 loss from a rental as capital loss vs ordinary lossCapital Loss = $247,000 of taxable income(not accounting for other items/itemized or standard deduction)Ordinary loss = $150,000 of taxable income(not accounting for other items/itemized or standard deduction)It is a big difference.

are the closing cost and realtors commission being taking into consideration when the determining the taxable amount?

are the closing cost and realtors commission being taking into consideration when the determining the taxable amount?

Generally the income generated from this type of rental is below the minimum taxable threshold for B&O and it is all credited back to you on the same return.

The profits in the S-corp can be distributed as a non-dividend distribution which is not taxable and will not be subject to FICA tax.

This seems only to work if your RE business doesnt earn much taxable income.

So you don't generate much taxable income (generally you will have very little taxable to start unless you have little debt).

.$25,000 Net Present Value of the taxes I would have paid from the Trust income over the years: assuming $2,500 a year in taxes for taxable income from the trust.So, the above UNEDUCATED guesses tell me that the CRT would have costed me a Net Present Value of $60,000 over its lifetime.