How To Avoid Capital Gains Tax On Real Estate

How to avoid capital gain tax on real estate. So first, let's just talk about what capital gains is short and long term, make a definition of that. Then the next thing, what are the strategies that you can use to not pay tax and actually just continue moving property into bigger growth? Many, many of us do that. And then the last thing is what are the mistakes that are commonly used when people buy real estate and don't ever put the tax implications in. So first of all, let's just talk about and give definition to capital gains. So understanding capital gains, the difference between short-term and long-term capital gains is the timing of the sale will affect your tax liability. So it's absolutely critical that when you buy and when you sell, and even when you buy, the other thing we see over and over and over is whoever's booking like your real estate, do they actually know how to book real estate properly? The depreciation schedules, if you did improvements, what's fixed years, a lot of bookkeepers and CPAs don't know how to book real estate. So when you're talking about some of the investments that I talk about, that are like more sophisticated, gas and oil, aviation, you need specialists in tax in all of those areas. And we have them on our team. So you're not going to have to go run around. That's why we call it integrated. So you could be, I'm in a cannabis business and I have a CPA. Now I just brought on to the team who's highly, highly, highly specialized in cannabis. He will then also reach back and talk to the gas and oil tax strategist. So it's a collective brain power is how specialized people get. Think about surgeons and how surgeons are so specific in their area. It happens in tax that way too. So avoiding short-term and long-term capital gains is critical. Those of you who are doing fix and flips, you may do that. You're going to be playing, especially if you do in less than a year, you'll pay short-term, which is more. So you want to really start looking at the tax side of what you're doing, whether you want to hold or flip, depending again, on your entire financial formula. And we need to see all of it, not just pieces of it. So many of you ask questions about one little sliver of your life. And I have 10 more questions about what else do you have? Like, do you have a business? Do you have real estate? Do you have other investments? Do you have this? Some of you got to just get organized so we can help you. Now, if you move into the biggest strategy, there's one of two is if you're a homeowner and a lot of beginning homeowners do this, they will come into a home and say they're a married couple. You can move 500,000 to the next home tax-free. As an individual, you can move 250,000 tax-free. So that's just trading up. So every two years you can use that strategy. And then when you trade up, you can move, buy a new home, make this one a rental, buy a new home two years later, make this one a rental. So I've seen a lot of millionaires in real estate just go on a two-year cycle of buying a new piece of property and they use that strategy. The biggest one is a 1031 exchange, which is only available the way we do it in America. So those of you around the world, that's why a lot of higher net worth people around the world do set up entities with us here in Nevada. So you can invest into real estate, gas and oil, use 1031. You can use our laws that you can't use in your countries. But a 1031 exchange is where you have a certain amount of period when you're selling one property to move all of it to another. It said like kind, but I think a lot of you think if it's a fourplex, it's got to go to fourplex. That's not true. If it goes to a fourplex, you could go buy a 20 fourplex. Like kind is a broader definition than you think. Again, you've got to get educated on what that really means. But that is the number one strategy is to keep 1030 wanting and continue to move that money. And then how companies relate to each other. What you do not want is say a C Corp, which is totally not associated to you to own the real estate because you want the depreciation schedule to come against your personal highest income or collective across businesses. A C Corp is a completely independent unit that's used for management, marketing. Some people call it a holding company. There's no such thing. That's a weird name. So just notice the jargon that's in the financial space. A lot of it's not accurate. And ever since COVID, everyone has come to this place called the internet. I call it the bathroom mall and saying they're experts about everything. I've got 25 years in just the longest standing mastermind and mentoring program in the world is called the big table. And I've been doing this since 1996, where I started with the rich dad, poor dad team. So you want to look for experience. You want to look for history. You don't want a new guru who just hits an influencer status, but they don't have any bestselling books. They really don't have a balance sheet that backs up their expertise. They're just trying to grab some cash really quick. So before I continue and wrap this up, I want you to subscribe to my channel. I want your five days a week. I want your kids listening. This is a family friendly channel. Five years up easily can be here listening, absorbing the content. You can even listen younger if you want. You want to start putting that into their subconscious, into their thinking, into their self-identity as their brain develops. So what are the biggest mistakes when it comes to capital gains is you didn't plan for it. Number one is you don't have a plan. You're trying to do turbo tax. So you're not even booking, right? You don't have a tax team. You don't have a mentor and a coach in business and finance. And I am a real estate millionaire multiple times over multiple, multiple times. There are years where I've made millions in real estate year after year after year. You can do this. If I can do this, I started as a farm girl from Nebraska. It's about learning. So I have six bestsellers, read them in the show notes. I'm giving you the first three chapters, my millionaire maker book, a gap analysis, and a way to get ahold of our office so you can have a one-on-one conversation at any point, go to askLaurel.com, A-S-K-L-O-R-E-L, ask a question, make a request. We'll be back tomorrow.