CalculateRealEstateROI

Tax

Real Estate Tax Strategy

Stacked deductions, deferrals, and structures that minimize lifetime tax on rental real estate.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Core concepts

Depreciation shelter

27.5-year straight-line + cost seg + bonus depreciation.

Deferral via 1031

Rolling gains into replacement property defers tax indefinitely.

Step-up at death

Eliminates all deferred gain and recapture for heirs.

Examples

  • $300k property: $9k annual depreciation + cost seg → year-1 paper loss.

Practical applications

  • All buy-and-hold investors.
  • Wealth transfer planning.

Common mistakes

  • Skipping cost seg on $400k+ basis.
  • Selling instead of 1031-exchanging.