@Aaron PetersIt's more that you find a CPA that specializes in real estate taxation to ensure that your tax return is prepared accurately and that you get every deduction you're entitled to.

When I did the rental analysis taught in "The Book on Rental Property Investing" I see myself with a monthly cash flow of $325-ish of which (I think) almost 1/3 would be due as tax at the end of the year.

The IRA is exempted from income tax on passive rental income, but not necessarily other forms of state or local taxation. 

You’ll also owe depreciation recapture on $36,365, which will be taxed at your ordinary income rate.I believe Bernie wants 25% not including the regular taxation issues of investment property.

He is a 1031 agent and attorney who specializes in real estate and taxation law.

These add to your balance sheet net worth and is recouped upon divestment of the property.Things you need to subtract from cashflow to get profit:- Accrual for capital expenditures and maintenance (sometimes referred to as reserve)- Accrual for future vacancy- Depreciation if you are accounting for taxation purposes

Below are current mortgage and refi detailsprimary home - 15 year/3% fixed / still 12.5 years left / 310k outstandingrental - 30 year / 4.375 fixed / still 29 years left / 175k outstandingrefinance primary residence - 15 year/ 2.875 fixed / 485k loan / payoff rentalthe idea to payoff rental sounds exciting..but I am worried about the taxation..is it possible to deduct interest payments (approx 35%) when I file taxes in 2021?

Generally if you average 7 or fewer nights or 8-30 nights and provide "substantial" services such as tours, house cleaning during a stay, meals, etc you DO have to pay self employment tax.Kudos to this CPA site (tarlow. com/2018/01/02/tax-ramifications-short-term-rental/):"When property is rented for short periods, special (and sometimes complex) taxation rules come into play, which can make the rents excludable from taxation; other situations may force the rental income and expenses to be reported on Schedule C (as opposed to Schedule E).If you have been renting your home or second home for short periods of time, here is a synopsis of the rules governing short-term rentals so you can prepare yourself for the upcoming tax season.Rented for Fewer Than 15 Days During the Year: If you rent your property for fewer than 15 days during the tax year, the rental income is not reportable, and the expenses associated with that rental are not deductible.

As I grow my portfolio, I want to reduce risk, taxation and free up my personal cash vested.

When it is, it comes out as either salary (taxed at your marginal rates) or are dividends (read: double taxation).Have a CPA run an effective tax rate projection for the three entity types and discuss the long-term pros and cons of each (including exit strategy).