Friday Weekly Q&A Call - 06/05/26 · 🏠 Lower Taxes w/ Ryan

Friday Weekly Q&A Call - 06/05/26

Here's a summary of the key takeaways from this session:

Real estate & retirement planning

Paid-off rental properties offer powerful retirement income — via HELOCs, reverse mortgages, or cash flow. Loan proceeds are not taxable income.
The "buy, borrow, die" strategy lets you tap equity tax-free while alive and pass property to heirs with a step-up in basis, eliminating capital gains.
Real estate syndications can compound toward retirement — reinvesting proceeds from each deal cycle accelerates the nest egg beyond stock-only projections.
Holding rentals until death is the most powerful way to avoid capital gains taxes entirely.

Retirement accounts & investment allocation

Watch for target date funds — their expense ratios (~0.5%) and early bond allocation can quietly cost thousands per year and drag on growth.
Younger investors should be 100% equities (U.S. index funds + ~20–30% international). Bonds become relevant only as retirement nears.
Order of withdrawals in retirement: cash first → taxable brokerage → traditional 401k/IRA → Roth accounts last (let Roth grow tax-exempt as long as possible).
Roth vs. traditional: high earners (37% bracket) benefit most from pre-tax traditional contributions; lower earners should lean toward Roth for tax-free future growth.
Backdoor Roth IRA ($7,500–$8,500/year) is a smart move for high earners who can't deduct traditional IRA contributions.

Solar panels on rental property

The residential clean energy credit (Section 25D) ended Dec 31, 2025 — but rental properties qualify for the Business Energy Credit (IRC §48/48E), still at 30%.
State rebates reduce your eligible cost basis. Example: $36K solar cost minus $18K Illinois rebate = $18K eligible basis → ~$5,400 federal credit (30%).
100% bonus depreciation can also be applied to the solar asset cost, stacking additional savings on top of the federal credit.
If the property is passive, bonus depreciation can only offset passive income down to zero — it cannot create a loss that flows to other income.
Grouping elections across properties can help hit the 500-hour material participation threshold and unlock full deduction benefits.

Selling rental property — tax mitigation strategies

1031 exchange — defer capital gains by rolling proceeds into a like-kind property.
Installment sale — spread the gain across two tax years to reduce the annual hit.
Hold until death — heirs inherit at the stepped-up fair market value; a near-immediate sale results in zero capital gains tax.
Placing a rental inside a solo 401k is a tax deferral tool, not a tax elimination tool — and it sacrifices bonus depreciation, cost seg benefits, and personal rental losses.
Taking lines of credit against appreciated assets (real estate or brokerage) avoids triggering capital gains while still accessing liquidity. Interest paid is typically deductible.

Mindset & philosophy

Think long-term — zoom out, volatility is temporary, don't check daily.
Know your balance sheet — map all assets and liabilities before making any move.
Minimize and defer — reduce what you owe today, push the rest as far out as possible.
Be aggressive early — full equities in your 20s–40s, stability comes later.
Hold, don't sell — selling triggers taxes, default to holding real estate.
Let compounding work — reinvest proceeds and don't pull money out unless you have to.

Thank you all for joining!

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Friday Weekly Q&A Call - 06/05/26