Real estate tax

Compliance and admin

Every strategy is only as good as the paperwork underneath it; this is the unglamorous part where the money made everywhere else gets kept or lost.

Every strategy on the other pages is only as good as the paperwork underneath it. This is the part nobody markets, the deduction you calculate right, the tax you pay on time, the documentation that turns an aggressive-but-legitimate position into one that survives review. It is not exciting. It is where the money made everywhere else gets kept or lost.

These pages cover the mechanics. The 199A deduction that gives pass-through owners a break most do not fully claim. State income tax, which quietly reshapes where and how you should hold property. Estimated taxes, wash sales, and the one that decides everything retroactively, surviving an IRS audit, which is really about what you did months or years earlier, before the notice ever arrived. The audit is won or lost before it starts. These pages are how you set that up.

Inside this hub

01

QBI deduction (199A)

The 199A deduction lets you deduct up to 20% of your rental income before it is ever taxed, and the 2025 law made it permanent. The catch is that your rentals have to rise to the level of a trade or business to qualify, and the IRS gives you a clean safe harbor to get there: 250 hours of work and good records.

02

State income tax and real estate

Own property in a state you do not live in, and that state wants to tax the income and the gain, no matter where you live. Multi-state investors file multiple returns, navigate credits to avoid double taxation, and, if they use a passthrough entity, can tap a powerful workaround to the federal cap on deducting state taxes.

03

Wash sales

The wash-sale rule stops you from selling a stock for a tax loss and immediately buying it back. It applies to securities, and understanding it matters to real estate investors for a specific reason: real estate is not subject to it, which opens a planning move that a stock investor cannot make.

04

Estimated taxes

Real estate income does not come with tax withheld, so the IRS makes you pay it in four installments during the year or charges a penalty. The good news is a safe harbor that turns a moving target into one fixed number: pay a set percentage of last year's tax and you are protected, no matter how good this year turns out to be.

05

Surviving an IRS audit

Real estate carries some of the most audit-prone positions in the tax code: large rental losses against a high salary, real estate professional claims, aggressive cost segregation. The good news is that audits are won on paper. The investor with contemporaneous records and honest positions has little to fear, and the one without them has everything to fear.

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If you need help with the tax side of your LLC, you don't have to figure out who to call. Start with me. I'll understand what you need, and with my gigantic Rolodex, I can put you in touch with the right specialist for you.

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Keep reading

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