Welcome back to another episode! Today, we’re diving into how depreciation really works and why so many people misunderstand its impact on their taxes.

📌 In This Episode, We Cover:

• The #1 Misconception About Depreciation – It’s NOT dollar-for-dollar tax savings!

• How Much You Really Save – A $100K depreciation deduction doesn’t mean $100K in cash savings—it means you’re saving on the taxes of that amount.

• Active vs. Passive Income – Why it’s critical to match your losses to the right type of income.

• Real Estate Professional Status (REPS) – How it can turn passive losses into active losses, letting you offset more of your income—including your spouse’s!

If you own real estate, run a business, or are looking for ways to legally minimize your taxes, this episode is for you.

🔊 Tune in now! And don’t forget to subscribe so you don’t miss next week’s episode, where we break down how to qualify as a Real Estate Professional and unlock even more tax-saving strategies!

In this premiere episode of Real Estate Professional Status Season 2! we dive into depreciation, the tax strategy every real estate investor must understand before jumping into cost segregation or accelerated depreciation. Too often, investors focus on the benefits of cost segregation without grasping the fundamentals of depreciation—leading to confusion and missed opportunities.

What You’ll Learn in This Episode:

🔹 What is depreciation? A clear, practical breakdown of how the IRS allows investors to deduct the wear and tear of a building over time.

🔹 Why real estate isn’t expensed immediately—and how depreciation turns your investment into a powerful tax shield.

🔹 The truth about “paper losses” and why depreciation can save you thousands (or millions) in taxes even though your property may be appreciating in value.

🔹 The IRS-defined useful life of real estate: 27.5 years for residential, 39 years for commercial—and why this matters.

🔹 Land vs. building: What actually gets depreciated and how property tax assessments determine the allocation.

🔹 Leverage & bonus depreciation: How investors can depreciate more than their initial down payment using financing strategies.

This episode lays the foundation for future deep dives into cost segregation, passive activity rules, the short-term rental loophole, and real estate professional status. If you want to offset your gains, minimize taxes, and maximize cash flow, this is where it all begins.

👉 Subscribe now and start leveraging depreciation like the pros!

In this episode, I sit down with Tim Johnson, a real estate consultant who specializes in helping business owners and real estate professionals leverage tax strategies to their advantage. We dive deep into the Real Estate Professional Status (REPS), why most CPAs don’t talk about it, and how business owners—especially contractors and real estate agents—can use it to legally minimize their tax liability.

Tim breaks down who naturally qualifies for REPS, the biggest mistakes people make, and why material participation is the key to passing an IRS audit. We also discuss why most accountants don’t prioritize tax strategies, how real estate can serve as a long-term tax shelter, and practical steps to document material participation without unnecessary hassle.

If you’re a business owner, real estate agent, or contractor looking to unlock massive tax savings, this episode is for you!