A Deep Dive With a CPA to Uncover All The Tax Benefits of Rental Properties

In this episode, we have Joel Jensen from Tax Sentry explain exactly why real estate is so powerful when it comes to tax benefits.  --- Transcript:   Michael: Hey everyone. Welcome to another episode, The Remote Real Estate Investor, I'm Michael Albaum. And today I'm joined by Emil Shour. And today as our guest, we have Joel Jensen from Tax Sentry, and Joel is a tax expert and guru, and is going to be talking to us today about what we as investors need to know about income taxes and how to strategize and plan for our taxes so that we can come out ahead. So let's get into it.   Theme Song   Michael: Joel, thank you so much for being here. Really appreciate you taking the time.   Joel: Sure. I love to be here.   Michael: Awesome. So can you give all of our listeners a little bit of background about yourself and how long you've been working in the tax space and kind of what you've been doing?   Joel: You bet. So I graduated with my master's degree from Brigham Young University in the early nineties. So it feels like a long time ago, but from there I went to work for Ernst and Young, which is one of the, we'll call them the last four large service firms out there. When I was there, they were the big six. Now I kind of call them the final four, but I was with Ernst and Young for about 10 years working on large audits, large compliance, scc transactions, that type of thing. And after doing it for 10 years, the part of the job I really, really liked was working with people, you know, the interactions I had with people, the part I didn't like was feeling like that was just servicing kind of these large companies.   So what I decided to do was leave Ernst and Young kind of start my own firm. So I could actually have a significant impact on an individual's tax and financial circumstances where I felt it was much more gratifying for myself personally. And I've been doing that for almost 20 years now, became a real estate investor myself, probably back in 2005. So I've been doing that as well on the side, which I really enjoy some houses, own some rental properties. So since then, I guess I'm in the real estate game, but my full time job is CPA. Great.   Michael: You know, it's so counterintuitive that you mentioned that the favorite part of your job working at one of the big six of the big four was interacting with people. Cause all the accountants I know the worst part of their day is when they have to interact with people.   Joel: I know there's probably only lasted 10 years, right? I'm like, ah, this isn't for me. I gotta go, gotta get out. I gotta get out now while I can.   Michael: Awesome. Awesome. So, and I love too that you're an investor because you drinking the Koolaid too. And so really talking and preaching and consulting on the things that you're also doing.   Joel: Correct. Yeah. So I think it helps, you know, if you're dealing with a CPA, for example, that at least they have a working knowledge of what it is that you do. And since I am in the real estate game, obviously I have lots of real estate clients, even contractor clients, anyone, even within the field of real estate, whether they own it or provide services to people who own real estate, that kind of outlines a significant of my clients.   Michael: Great, great. So I wanted to jump into the meat and potatoes of this tax discussion right away. And I'm gonna let Emil kick it off in talking about deductions and kind of what those are, what those look like, what people should be aware of.   Emil: So the various types of deductions that real estate investors should have on their radar are property taxes, property insurance, mortgage, interest, property management, fees, property repairs, and maintenance, capital improvements, and ongoing maintenance and advertising expenses. So things like the cost to list a rental, to find a new tenant marketing your property for sale. Those things are also deductions as well.   Joel: Let me go through maybe the aspect of wh