Morris Invest: Rental Property Tax Deductions
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Morris Invest: Rental Property Tax Deductions


100 Comments

  • Jaxx137

    I wish he could recommend his accountant to me. I need to put a team of quality professionals together looking to begin down a real estate investment path. I am in NJ too.

  • Jim

    Can I write off these expense if I don't have a LLC. I have 2 homes that I rent out in another state. It's not far to drive and it's by my mother home. I was wondering can the travel , repairs and using my parents home as a office cane be written off. First year doing this.

  • tpmartins

    I was wondering how deductions apply to purchasing a new property. From what I understand, you can’t deduct start up costs. Is this correct? If so, if the previous tenant is in the house after you close, and move out after a few days, are you then able to write off start up costs? I’ve also read where a loophole is to list the property for rent day one, even though it’s not ready to be rented.

  • Freddy Perez

    Thanks for the great video Clayton, question: I'm in the process of purchasing my first rental property, do all these tax write-offs apply only if you have an LLC or can I write off taxes if the property is under my name?

  • Simon Martinez

    Hey bud, so Im looking to hire a CPA to handle my ten properties in texas. I was wondering if I should just hire someone in my home town if they arnt necessarily specialized in real estate? Or should I seek a better CPA that may be far away? I always thought it would be best to be face to face with people. Any advice helps.

  • Joshua Ney

    income tax is written for entrepreneurship, hahaha….it would be 0, if that was the case, it's essentially forced entrepreneurship

  • Manny Dorticos

    What about property appraisals and inspections? For example – this past year I paid for 2 property appraisals and inspections and DIDN'T buy the property because the deal fell through. However, I still incurred the expense. Are these tax deductible?

  • Raul Jaquez

    I was just listening to the Rich Dad Poor Dad podcast on depreciation and searched on youtube for more elaboration and it was Morris invest who they were speaking too…. so wow small world. Thanks for the valuable video!

  • Nick Hurley

    Does this still apply after trumps tax escapade? I own one rental property as of now. trying to buy another primary home, currently renting. IM considering starting an LLC next week in SC, rental property is in VA BEACH.

  • philipjLA

    Would you recommend purchasing Turbo Tax audit protection, it's $60 and claims to represent you if you get audited? I have 3 rentals valued at 600k total and have losses on all the properties, lowering my taxable income substantially.

  • TheFNASSHOLE

    Do you have an opinion on mobile home rental investments and stick built homes?
    I just recently started with my own rentals but my dad has a large mobile home park with 100 lots and 42 homes are his And the ROI is really really good.

    The reason I ask is because I know that mobile home value drops very quickly but at this point it doesn't concern me because the ROI is so high and I have worked with my dad on buying and selling mobile homes and my repair costs are extremely low.

    But I am looking into investing on more rental homes And would like to know your opinion.

    After Deducting for 40% From my gross income for taxes repairs and God knows what, My ROI is 49% on one home and 48.5% on the other.
    And both homes are debt free at this point. I paid $8,000 on one and $9,000 on the other and one brings in $600 and the other is $550 per month.

    But when it comes to re-investing the only downside I have run into is that the mobile homes can only offer me a laughable amount of collateral.

    If it were stick built I could use the homes as collateral to keep re investing and having higher value assets in the long run. But the ROI on stick built homes is very low compared to Mobile homes.

    Would you keep buying cheaper mobile homes with high ROI's or would you mix stick built homes into that portfolio to have appreciating assets like stick built homes?

  • Sally Victor

    Incorrect information! For example: a new roof is NOT a repair and therefore NOT deductible. .
    A new roof is an improvement (Morris even used the word "improve" when referring to the roof. (around the 4 minute mark) Long distance travel to visit your properties, you canNOT deduct meals 100%. Meals are only 50% deductible. Travel in your car to your rental properties: you can NOT claim both mileage and gas expenses.

  • Stephen Shelton

    The mileage credit is ridiculous! For example, I know people who use a service to accept rent and of course there's a fee. I have 3 local properties so I can drive, pick up the rent, and stop in the place I was undoubtedly going to drive to anyway for lunch because it's on the way. Now instead of paying a service 2% or 3% I get all of the money, an opportunity to visually inspect the property (last time on one I realized I need to clean the gutters), and the drive itself becomes a profitable trip at tax time.

  • Randy Martens

    Slightly off topic but can you do a video on buying real estate with high property tax rates or do you just avoid them altogether?

  • Ian Elbert

    So if you can write off insurance and property management expenses does that mean you don’t have to factor those into your roi at all?

  • denalikid72

    Extremely valuable information. Would you care to share a preferred accountant? His or her location doesn’t matter if they are worth it and knows the business they can have my business. Thank you again for all of the informative videos!

  • Jerry west

    i live in kansas city and there are some nice looking duplees for 110-140k that look very nice in a suburban area, i dont have much money to put down but i could do a first time home buyer right? I have good credit etc, how much do you think I should save up before buying/looking for one? Live in one rent out one

  • Kevin rodriguez

    Do these deductibles work if you're not active with your rental property? Can I apply these if I'm passive such as just hiring property management to do all the work?

  • Jesse Mitchell

    You did not cover one more point . If I earn money from rental on my condo after my expenses insurance and everything else comes out can I take every penny of what’s left And pay straight towards the mortgage to paying the rental condo off. And just write on my taxes for the end of the year that I didn’t have anything to pay taxes with because everything I had left went to expenses and paying the mortgage on my condo ????

  • Jonathan Hughes

    Jesus against money and taxes. He called Mathew a tax collector from his job. Jesus wants us to use ask and receive world wide. Lucifer invented money.

  • Alex

    Are these write-offs only possible if you have your properties under a legal business entity, or can you make these write-offs as an individual as well?

  • Johann-Sebastian Lansky

    So I just bought my second home , but had to make it my primary resistant due to my finances. And will live in the property of course for at least the first year.
    However I have two renters lined up, to off set the mortgage.

    Should I still create a LLC and treat the property part that I rent as a rental property,
    or lets say can I ?

    Awesome videos btw

  • Jordan Kaufman

    I can't get over people disliking videos like this. Its useful to you great, if not go watch something else… but 43 people felt the need to dislike this video. Very lame!

  • Tom Cisso

    Just started renting. Your video is extremely helpful. Concise and to the point. I like that. Keep it up, you're doing a great job!

  • dick weasel

    Replacing a roof is not an expense, it is an improvement that extends the life of the property and a s such must be depreciated of 27.5 years and not expensed in one year. A small portion of the roof can be repaired and be claimed as an expense. Ithe IRS ruling is that if any work restores the property or extends the usefull life of the building, it must be depreciated not expensed. Meals can only be expensed up to 50%

  • dick weasel

    Casual losses far into a somewhat nebulous category. The IRS allows a casualty loss to go to the lowering of the cost basis of the property rather than a straight deduction so that when you see the property there is less of a taxable gain. Some casualty losses are allowable but this is a nuanced area. Claiming a home office is also nuanced in that it reduces the amount of property taxes on your own home that you can deduct.

  • Emma & Remy’s Story

    Can I as an investor of a rental property write off expenses for initial rehab of a house and the contractor’s work on the house? Your videos have been extremely inspiring and informative. Hope to get out of the rat race soon.

  • Haru Koyama

    But if you don't pay tax now. You will need to pay later when you sell the house. When you sell the house we are required to pay back the deduction portion taken before…

    We pay either now or later on.

    Which way is better. If one is selling the house in 2 years?

    By paying later on we have more cash flow.

  • EAGLE___EMPIRE

    If I have a property that Im barely clearing the mortgage and havent done much in repairs so far, should I file my taxes with the rental property, or just skip this, low key 🙂

  • Haru Koyama

    Here is an great example I found on Nolo:

    Viola bought a small apartment building and sold it six years later for $300,000. Her starting basis was $200,000. During the time she owned the property she took $43,000 in depreciation deductions and paid $13,000 for a new roof (an improvement). Her depreciation deductions reduced the property's basis, but the roof improvement increased it. Her basis at the time of the sale is $170,000. Viola calculates her taxable gain on the property by subtracting her adjusted basis from the sales price: $300,000 – $170,000 = $130,000.

    As you can see, when you sell your property, you effectively give back the depreciation deductions you took on it. Since they reduce your adjusted basis, they increase your taxable gain. Thus, Viola’s taxable gain was increased by the $43,000 in depreciation deductions she took. The amount of your gain attributable to the depreciation deductions you took in prior years is taxed at a single 25% rate. Viola, for example, would have to pay a 25% tax on the $43,000 in depreciation deductions she received. The remaining gain on the sale is taxed at capital gains rates (usually 15%, 20% for taxpayers in the top tax bracket).

    So basically there is no benefit to depreciate property. Uncle Sam will get you either now or later. If you leave all the property to your heir, they will be burden to heavy tax later on, that they might as well not take it.

    I do not see the benefit or anyway that you can just hold the property forever. Eventually everyone will die, all asset will need be transfer to someone else. That someone will be burden to all the tax, unless the successor just donate all to charity like my uncle did.

  • Haru Koyama

    Your accountant is correct… Below is an great example I found:

    The basis of property you inherit is usually the property’s fair market value at the time the owner died. Thus, if you hold on to your rental property until death, your heirs will be able to resell it and pay little or no tax—the ultimate tax loophole.

    Example: Victoria inherits her deceased parents' home. The property’s fair market value (excluding the land) is $300,000 at the time of her uncle’s death. This is Victoria’s basis. She sells the property for $310,000. Her total taxable profit on the sale is only $10,000 (her profit is the sales price minus the home's tax basis).

    The basis of a home or other property you receive as a gift is its adjusted basis in the hands of the gift giver when the gift was made.

  • Haru Koyama

    What if an investor has no one to pass their real estate property to? What would be the best course of action to benefit from the real estate asset saving?

  • Internal Flight

    Cheers for this, I been tryin to find out about "passive income investor" for a while now, and I think this has helped. Have you heard people talk about – Qonmily Passive Formality – (do a search on google ) ? Ive heard some super things about it and my co-worker got great results with it.

  • Juan Morebeer

    In most cases a new roof on a property would likely have to be depreciated over time and could not be deducted all in one year.

  • Nathan Downs

    Disagree that replacing the roof is a ‘repair’. That is a capital expense. This could have changed since the video was made.

  • Zulema Rojas

    I'm going to take a class on preparing taxes, and there are about 6 levels to achieve to be a professional tax consultant. This really is an eye-opener for me. Thank you 😊 so much?

  • Suzie Q

    A write off is still money spent.

    Yes it lowers taxable income but it’s still money spent!

    I’m currently trying to decided on whether to do real estate investing with properties vs REITs.

    Any advice?

  • Gregory Stearns

    Hey Clayton, for depreciation, do we simply divide purchase price by 27.5? Or is it current market value each year?

  • Philippine Dawn

    Thanks for de-mystifying the idea of "no taxes on investment property. " Robert Kiyosaki makes it all sound like the world is brainwashed and miss educated.

  • Nadiya QT

    I know 🤦🏽‍♀️🤦🏽‍♀️🤦🏽‍♀️I should be listening, but I'm mesmerized by your eyes🤷🏾‍♀️🤷🏾‍♀️🤷🏾‍♀️

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