LLC not needed to qualify for 20% pass through deduction

So new tax law discourages owning, encourages renting?

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It still encourages owning since it still allows mortgage interest deduction. If you allow mortgage interest deduction, why not the car loan interest?

Expense is used to offset business income. A wage earner has no business income, why should he expense mortgage interest and property tax against his wage income?

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Why should ā€œbusiness incomeā€ be treated differently from wage income?

I own quite a few houses. I donā€™t think I have added much to the economy. Itā€™s called ā€œrent seekingā€ for a reason.

Suppose we have Homeowner A and Homeowner B who live in identical condos next door. By switching apartments, A rents from B and B rents from A, suddenly they can deduct the full amount of property tax and mortgage interests. Does the society benefit from this business activity?

Omg, you did not understand anything I said. If A rents his condo for $4000 to B, A will need to pay tax on rental income! Rental income = $4000 x 12 - property tax - mortgage interest. Most homeowners will have a positive net rental income. So I would prefer IRS to count my gross rent as 0, and I still deduct my rental mortgage interest from other income. Because thatā€™s the good deal homeowners get.

Almost all homes will generate positive rental income after some years!

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You forgot the depreciation. And the 20% off you just posted above.

Most landlords pay exactly $0 tax on their rental income because their income is negative.

Depreciation is a tax deferral, you will need to pay back. Iā€™m paying tax on my rental income. You will if you pour your stock money to pay off mortgages

I see. Thatā€™s your mistake right there.

You can still make large donations to franchise tax board and IRS

Considering how much shit is shoveled on landlords by our communist state government I will take any tax advantage I can get.
My old partner just raised rents and ended up kicking out some Latino tenants in RWC. He was accused of being racist and was picketed. He bought the 4 unit building for his Latino workersā€¦ Redwood City is quickly being gentrified. There will be a huge push for rent control. Racism will be used as a hammer by the leftā€¦ But it is Facebook that is causing this huge rent upheaval. Zuckerman needs to build some housingā€¦ this same buddy has spent 15 years to get a 5 house subdivision approved in San Carlos. The zoning allowed 24 units. These Peninsula cities are the real racistsā€¦ Stopping projects. Down zoning. Not legalizing the illegal units in Fair Oaksā€¦ all institulized racismā€¦

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Adjust rent such that rent x 12 - property tax - mortgage interest = 0 :wink:

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Yes the NIMBYs are the real racists.

They check that you charge a fair market rent. If your rent is too low, auditors might knock on your door

Iā€™m sure it exists somewhere.

When racism is abused as an excuse or as a weapon, people may eventually become indifferent to it. If everyone is a racist, it means nobody is

Borrowing enough :roll_eyes: such that Market rent * 12 - property tax - mortgage interest = 0

People forget we have sub 3% yield in the Bay Area. How can you make money in rental market with a mortgage? Even without depreciation your income will be negative.

My scheming homeowners A and B wonā€™t be able to deduct most of property tax before the scheme . It will be net gain for the home swap.

That works for tax purpose. But many ppl lost their home to foreclosures.

Anyway for most homeowners, property tax deduction is useless. It only affects top 1% anyway. Those top 1% can each buy 10 rentals in Vegas next month.

Most people have no or very small mortgages. Only the recent buyers have a big mortgage, they are the top 1% anyway. Democrats canā€™t use the 1% to represent its base. On the contrary, 1% is the very enemy of its base

Salt lending, yes it exists, and i know itā€™s stupid.

It does. check my previous message.