Be careful with the opportunistic view. Nothing wrong with being optimistic, but if from a fundamental business analysis something doesn't seem to make sense at the moment, then take caution before diving in. Of course this is by no mean to discourage from pursuing it. Mainly just commenting on your wait-and-see-hope-it-will-work framework.
Overall I'd plause for the attempt, and would love to get in touch specifically for the QBO api. That's something I'm contemplating myself.
yeah so two points on that, first the gain at sale can be avoided through 1031 sec of tax code, effectively providing tax shelter, similar to how unrealized gain in stock but even more flexible as it allows you to switch asset classes (like kind swap).
Tax aside, there's also the leverage. I can put down 5% and loan 95% to get 100% of the return of investment with exceedingly low interest the federal banking system subsidized for housing as a necessity, vs. commercial loans, but essentially doing this as business endeavor. By the end of all that, I can even offset income with the interest expense, the only loophole on interest expense remained in tax code. So folks are doing this all day long.
You can't really do that with stock, or you face the ridiculous rate in margin trade.
The leverage plus tax benefit allows wealth accumulation over time.
I like this idea very much. Although given the incumbents and their aggressive pricing, it's hard to eventually productize something and build a business, if that's your goal.
The space is also complicated with regulations that are not easy to translate from one country / state to another. So an open source approach may not work perfectly.
However, I'd love to see some Open Source options that can piggyback on existing services, e.g. QBO api, so we can avoid paying the advanced features that are expensive, a lock-in and leaves something to be desired for customizability.
Yeah i think that makes a lot of sense - the main benefit on RE though is in the tax shield if you invest DIRECTLY so the tax benefits can pass through, vs. a REIT. The depreciation recapture can be avoided if you handle it in the correct way, e.g. 1031 exchange or hold.
But I agree there's more risk and it's hard to be consistently on the winning side.
On the stock market front, what's your current approach allocating things? e.g. Do you do more like a wealthfront / betterment type of portfolio, or something more sophisticated? Would like to learn more on that front for sure.
It's mainly because the tax code has much better treatment (or more remaining loop holes intentionally unpatched) for RE in particular, due to its depreciation and interest expense write-offs.
Stock market in general has a slower avg return (if diversified) and much higher risk if undiversified. Tax loss harvesting would help generating write-off in these case, but wash sale is a constant stress to manage as well.
Appreciate the subredit recommendation. Will check that out for sure.
Not founder's share I was granted equity award pre-IPO, and these are also RSUs so not even possible to do 83(b) at grant time I believe.
So these all show up as W2 regular income, and on that note, it might be hard to do charitable, given the 'tax election' is set to 'sell shares to cover tax' which is the only option my employer set in the tax plan. So that amount that could be donated is not even available to me but is withheld and sent straight to IRS.
I'd have to put my own money in to get the refund. Will be a big cashflow challenge given I'll do RE investments as well.
It's all relative. If another guy next to me who has the exact income but are 'passive income' i.e. from stocks, real estate, etc. then there's a multitude of ways to pay little to no tax. That's probably what I should have complainted about instead.
Overall I'd plause for the attempt, and would love to get in touch specifically for the QBO api. That's something I'm contemplating myself.