# Summary of the Tax Strategy

This transcription outlines a method for minimizing tax liability, emphasizing strategies that capitalize on real estate investments. The speaker presents a four-step process:

1. **Become a Real Estate Professional**: The speaker suggests that one should become a real estate professional according to IRS definitions because they enjoy significant tax advantages.
2. **Purchase Real Estate**: The next step involves investing in real estate assets.
3. **Utilize 1031 Exchanges**: When selling real estate, the speaker advises using 1031 exchanges to defer capital gains taxes.
4. **Borrow Against Property**: The speaker recommends borrowing against the property to access cash for living expenses, without triggering tax obligations.
5. **Transfer Upon Death**: Finally, the speaker suggests transferring real estate through a will or estate plan, rather than gifting it during one’s lifetime, to ensure beneficiaries receive a step-up in basis, thus minimizing tax implications, as long as the estate is below the $11 million threshold per person.

This summary captures the methodical approach to capitalizing on real estate for tax benefits while adhering to IRS regulations.

Jasmine DiLucci, JD, CPA, EA

Here's how to never pay tax again. So this is what I would do if I was solely basing my decisions off of tax and nothing else. First, I'd become a real estate professional under IRS definitions, because they receive by far the best tax advantages.  Second, I would purchase real estate. Third, whenever I sell the real estate, I would only do 1031 exchanges so that the capital gains is deferred.  Finally, what I would do is you could borrow against that property to use that cash to live off of. And then I would only transfer the real estate by leaving it in my will or in my estate, not by gifting it while I'm alive, so that the people that receive it get a step up in basis. And as long as you're under that estate tax threshold of 11 million per person, that's your tax-free formula.


How to Avoid Paying Taxes Legally

here's how to never pay tax again so
this is what I would do if I was solely
basing my decisions off of tax and
nothing else first I'd become a real
estate professional under IRS
definitions because they received by far
the best tax advantages two is I would
purchase real estate and third is
whenever I sell the real estate I would
only do 1031 exchanges so that the
capital gains is deferred and finally
what I would do is you could borrow
against that property to use that cash
to live off of and then I would only
transfer the real estate by leaving it
in my will or in my estate not by
gifting it while I'm alive so that the
people that receive it get a step up in
basis and as long as you're under that
estate tax threshold of 11 million per
person that's your tax-free formula

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How to Avoid Paying Taxes Legally

Transcription