Thomas Castelli

Helping real estate investors reduce taxes & build generational wealth. Tweets ≠ advice. | Co-host of Tax Smart REI Podcast (4.7M+ listens). 👇

[Thomas Castelli @thomascastelli_]

It's been a while, but I am thrilled to announce my return to Twitter!

For those who may not know me, my name is Thomas Castelli and I'm a passionate advocate for empowering individuals - particularly real estate investors - with the knowledge to reduce taxes and make sound financial decisions.

I've dedicated my professional career to assisting real estate investors and business owners reduce taxes through strategic planning.

And I've been fortunate enough to help hundreds of clients navigate the world of real estate tax.

I believe that understanding your finances, minimizing taxes, and making smart investment decisions are critical skills everyone should possess, no matter your profession or background.

In the coming weeks and months, I plan to share valuable insights and actionable tips about real estate tax strategies, investing, and business.

From tried-and-true methodologies to emerging trends, my goal is to help you navigate these often complicated areas, all while unlocking possibilities for reducing taxes and building wealth.

Feel free to connect with me here or share this post with anyone you think could benefit from these insights.

Looking forward to re-engaging with the Twitter community!

[Thomas Castelli @thomascastelli_]

2024 Presidential Tax Plans: Taxes & Bourbon Live Stream https://t.co/jfDop0K1TH

[Thomas Castelli @thomascastelli_]

This investor almost lost $684,646 in real estate losses.

A tax court battle with the IRS followed.

Here’s how it played out 👇

Dr. Mohammad Zarrinnegar and his wife, Dr. Mary Dini, worked shifts at their joint dental practice.

But outside of their dental work, Dr. Zarrinnegar was deeply involved in managing their real estate investments.

He managed four rental properties and engaged in brokerage-related activities like tours, open houses, property viewings, and client meetings. 🏠

The couple reported income from their dental practice each year and real estate losses of:

💰 $221,582 for 2010
💰 $242,276 for 2011
💰 $220,788 for 2012

However, the IRS disallowed the deductions they claimed for those real estate losses, determining that they were passive activity losses that could only be used to offset passive income. 🚨

↩️ But here's where things took a turn:

Rental activities are generally considered passive unless the taxpayer can prove they qualify for REPS.

To qualify, you must:

1. Spend more than 750 hours per year on real estate activities.
2. Ensure that more than half of your working hours are in a real property trade or business in which you materially participate.

🧾 How Dr. Zarrinnegar proved his case:

Dr. Zarrinnegar was able to satisfy all these requirements through:

📋 Logs of his hours
🗣️ Testimony that these logs were prepared contemporaneously
🕵️‍♂️ Detailed and lengthy testimony about the contents of his logs
👩‍⚕️ Testimony from other witnesses, including his wife

All of this evidence was deemed credible and corroborated Zarrinnegar’s logs, showing that he spent more than 1,000 hours on his real estate activities each year—far exceeding the required 750 hours and the approximately 728 hours he spent each year as a dentist. 🦷

The result? The tax court permitted all of his losses as non-passive. ✅

The lesson?

Meticulous documentation, credible testimony, and a strong understanding of the tax rules for REPS can make all the difference when claiming deductions.

Don’t let the IRS disallow your deductions due to poor record keeping—be prepared!

[Eckard Enterprises @EckardNews]

The wait is over, click below to watch this insightful webinar and discussion with Troy W. Eckard, Founder & Chairman of Eckard Enterprises, and @thomascastelli_ , co-host of the @taxsmartrei Podcast and Partner with Hall CPA, LLC.

https://t.co/onD3DY6HQx

#oil #webinar

[Thomas Castelli @thomascastelli_]

Would REPS be necessary if the $25k loss allowance was indexed to $69,500?

• Reduced need for REPS.
• Easier access to deductions.
• More investors benefit.
• Focus on growth, not REPS criteria.

Indexing for inflation could simplify tax savings and broaden access!

[Thomas Castelli @thomascastelli_]

How the de minimis safe harbor can save you thousands:

• Applies once the property is rent-ready.
• Deduct capex under $2,500 per invoice.
• Boost rental losses to cut taxable income.
• Reduce depreciation recapture.

Perfect for small repairs like appliances.

[Thomas Castelli @thomascastelli_]

Use the triple tax benefits of paying your kids:

• Hire them for business tasks.
• Deduct their wages to reduce taxable income.
• Kids earn up to $14,600 tax-free in 2024.
• Fund a Roth IRA for their tax-free growth.

Saves you thousands and teaches valuable life skills!

[Thomas Castelli @thomascastelli_]

Avoid costly real estate tax mistakes:

• Keep detailed records.
• Claim depreciation to reduce taxable income.
• Report rental income accurately.
• Carryforward passive losses each year.
• Use 1031 exchanges to defer capital gains taxes.

Maximize your tax benefits!

[Thomas Castelli @thomascastelli_]

@JettBlast00 It’s considered a business. Which means you don’t need to qualify for the real estate professional status (REPS) to use the losses to offset W-2 or active business income.

[Thomas Castelli @thomascastelli_]

The #1 tax strategy for real estate investors in 2024:

1. Buy a rental in a vacation market.
2. Rent for avg of 7 days or less.
3. Self-manage the property.
4. Use cost seg & bonus depreciation to create non-cash losses.
5. Offset W-2 or business income.

It’s the STR Loophole!

[Thomas Castelli @thomascastelli_]

@elonmusk We love you Elon. Trump 2024 — there you have it!

[Thomas Castelli @thomascastelli_]

How a misstep cost an investor $147,635 in taxes:

• Put a rental property in an S-Corp.
• S-Corps lack the tax benefits of LLCs/personal ownership.
• Faced double taxation on sale.
• Paid $147,635 in unnecessary taxes.

Choose the right structure—consult a tax strategist! 💡

[Thomas Castelli @thomascastelli_]

How Elon Musk used TSLA stock to buy Twitter (X):

- Pledged TSLA shares as collateral.
- Secured billions in loans without selling stock.
- Used the funds to purchase Twitter.
- Maintained TSLA ownership.
- Benefits from appreciation + tax benefits

Leverage without liquidation!

[Thomas Castelli @thomascastelli_]

Here's what a $1.5M salary looks like in New York City:

Gross Income: $1,500,000
Federal Tax: $513,150
State Tax: $99,150
City Tax: $54,000
Social Security: $9,114
Medicare: $33,450
Total Tax: $708,864

🚨 Net Income: $791,136
Tax Rate: 47.26%

Net income in Florida: $944,286

[Thomas Castelli @thomascastelli_]

Unlock triple tax benefits with a Health Savings Account (HSA):

• Tax-Deductible Contributions: Reduce taxable income
• Tax-Free Growth: Grow savings tax-free
• Tax-Free Withdrawals: Cover medical expenses tax-free

An HSA helps you save on healthcare while growing wealth!

[Thomas Castelli @thomascastelli_]

Want to save 5-figures in taxes with your next vehicle?

• Buy one with a GVWR of 6,000lbs+
• Use it 50%+ for business over the next 5 years
• Apply bonus depreciation for a non-cash loss
• Offset that loss against your business income

Make your car work for your wallet!

[Thomas Castelli @thomascastelli_]

@MikeTighe_ I didn't see anything about that 🤷‍♂️

[Thomas Castelli @thomascastelli_]

🚨 Breaking News:

Biden recently proposed a 5% rent cap for certain investors

Here’s what you need to know👇

✅ Federal Tax Breaks

Some landlords must cap rent increases at 5% to retain valuable federal tax benefits.

✅ Depreciation Write-Offs

Faster depreciation write-offs are only available if annual rent increases are limited to 5%.

✅ Applicability

Affects landlords with over 50 units, covering more than 20 million units nationwide.

✅ Exceptions

New construction and substantial renovations are exempt from the cap.

✅ Policy Goal

Aims to stabilize rents and balance tenant needs with incentives for affordable housing supply.

President Biden’s plan seeks to protect renters while encouraging the development of more affordable housing.

👉 Do you think this will work?

[Thomas Castelli @thomascastelli_]

@sak_dreamer My guess is probably not.

[Thomas Castelli @thomascastelli_]

@Nicolascole77 🤖