Tax Strategy · 13 min read

Real Estate Tax Strategy: A Complete Overview

Depreciation, cost seg, 1031, opportunity zones, and the REPS qualification.

The Core Triangle

Depreciation shelters cash flow. 1031 exchanges defer gains. Step-up basis at death eliminates them entirely. This is the wealth-compounding engine of real estate.

Real Estate Professional Status (REPS)

If you qualify as a REPS (750+ hours, > 50% of work time), passive losses can offset active income. For high-W-2 investors, this is the single most valuable tax election available.

Opportunity Zones

Defer and partially eliminate capital gains by investing in designated OZ funds. Best for investors with large pending gains from another source.

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