4 ms·

Care to share how you can get a $180k tax credit for buying a house?

• BeetleB 4y ago
  Real estate businesses have a ridiculous amount of tax benefits. The terms to look up are: Cost Segregation Bonus Depreciation (There's a third one I can't remember). She basically utilized all three. The larger the value of the house (over $1M in her case), the greater the benefit.
  • fnimick 4y ago
    These just allow you to claim deductions which reduces your tax liability - it's not like you get a _credit_ out of it.
    • BeetleB 4y ago
      Yes, but because of the high value of the property, your deductions can be huge. I was using the word "credit" a bit loosely. The point is that her deductions is well above the quoted $180K. The equivalent extra refund she'll get due to them was $180K. This is also because they are high income earners (one of them has a regular job), and they've manipulated things so that they can apply the deduction to the W-2 income (not usually possible). The federal tax bracket is 35+% - not sure if they can apply it to their state's income tax, but if they can, it's another 10-11%. So you don't need a massive deduction to get the equivalent of $180K refund.