How Real Estate Reduced One Business Owner’s Taxable Income by $22K
- By Jim Blackburn
- on
Client Profile:
- Name: Marisol
- Age: 47
- Occupation: Owner of a mobile pet grooming business
- Goal: Lower taxable income while building long-term wealth
- Location: Austin, TX
The Situation
Marisol was making great money from her business — grossing over $185K/year — but when tax season hit, her CPA kept delivering bad news.
“I was working hard, but writing huge checks to the IRS. I needed a better plan.”
We introduced her to the tax advantages of owning real estate and helped her understand how depreciation and write-offs could dramatically reduce her taxable income without reducing her cash flow.
The Strategy
Marisol purchased a $435,000 duplex and rented out both units.
Her CPA and our team collaborated to:
- Use depreciation to claim a $15,818 paper loss
- Write off expenses like property management, repairs, and mileage
- Track business use of her home office, which she owned and later refinanced
She wasn’t “losing money” — she was shielding it.
The Numbers (Year 1)
Tax Benefit | Amount |
Depreciation (on building value only) | $15,818 |
Operating Expenses | $6,700 |
Interest Write-Off | $3,400 |
Total Deductible Losses | $25,918 |
Taxable Income Reduction | $22,000 |
Estimated Tax Savings | ~$6,160 |
Marisol also cash flowed $415/month from the duplex — income she got to keep, tax-deferred.
The Results
- Saved over $6,000 in taxes
- Used that savings + cash flow to fund a SEP IRA
- Now under contract on a small commercial building for her grooming vans
- Says real estate gave her the “missing piece” of her wealth-building plan
What Marisol Said
“My income looked smaller on paper — but I kept more in real life. I finally feel like I’m working for me, not just the government.”
Takeaway for Readers
Owning real estate isn’t just about building wealth. It’s about keeping more of what you earn today. The tax code rewards owners — not renters.
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