As a real estate investor, one of the things I love most about this business is how it allows you to not only build wealth — but keep more of what you earn. I recently sat down with Amanda Han and Matt MacFarland, the husband-and-wife team behind Keystone CPA, to talk about how smart investors are using real estate to dramatically reduce their taxes and supercharge their returns.
Amanda and Matt are tax strategists who specialize in helping people use real estate to save massive amounts in taxes. And while that might sound like something only full-time investors can benefit from, they shared that even passive investors can access powerful tax advantages — if they know where to look.
Here are a few key takeaways from our conversation.
Why Real Estate Is the Ultimate Tax Advantage
When I asked Amanda and Matt why real estate stands apart from other asset classes, the answer was clear: depreciation.
As Matt explained, when you buy a stock, you don’t get to deduct the cost until you sell it. But with real estate, the IRS allows you to take a “paper loss” each year — even while your property may be appreciating in real life.
That’s the beauty of depreciation. It allows you to write off a portion of your property’s value each year to account for wear and tear, which can completely offset the cash flow you’re earning.
Even better, as Amanda pointed out, you calculate that depreciation based on the full purchase price of the property — not just your down payment. That means if you bought a $500,000 property with only $100,000 down, you get to depreciate the full $500,000 value. That’s a leveraged tax advantage most people never realize exists.
Bonus Depreciation and the “One Big Beautiful Bill”
Amanda and Matt also shared some exciting news: with the passage of what they call the “One Big Beautiful Bill,” 2025 will bring back 100% bonus depreciation.
That means certain parts of a property — furniture, fixtures, appliances, even some landscaping — can be fully written off in the first year through what’s known as accelerated depreciation or a cost segregation study.
In some cases, that can result in first-year tax benefits that exceed your original cash investment. For example, a $100,000 down payment could generate $150,000 in paper losses your first year.
That’s why, as Amanda put it, “This is the game the wealthy play.”
Investing for Tax Savings (Not Just Returns)
I shared with Amanda and Matt that many of our wealthiest investors are actually investing in real estate primarily for the tax advantages.
They agreed — and explained that it’s often smarter to reinvest money you’d otherwise pay in taxes. “If you had the choice,” Matt said, “would you rather pay that money to the IRS or invest it in an asset like real estate?”
When you think about it that way, the return on “tax savings” becomes an undeniable part of the equation.
Can Passive Investors Really Benefit?
One of the biggest myths Amanda and Matt love to debunk is that passive investors don’t get tax benefits.
While it’s true that certain losses may not offset your W-2 income, you’re still earning cash flow and appreciation without paying more in taxes. That’s a win by any standard.
And if you have other forms of passive income — say, from a business investment or partnership — your real estate losses can offset those earnings as well.
Matt shared an example of a doctor who owned a piece of a surgery center that generated seven figures in passive income. By investing in real estate syndications, he was able to use paper losses from depreciation to completely offset that income — saving hundreds of thousands of dollars in taxes each year.
Using Retirement Funds to Invest in Real Estate
Another area where investors leave money on the table is retirement accounts. Many people don’t realize they can use their IRA or old 401(k) to invest directly in real estate — through a self-directed account.
As Amanda explained, “You’re not cashing out your retirement and paying penalties. You’re simply moving it to a custodian that allows real estate investments.”
By doing that, you can invest in what you understand — and let your returns compound tax-deferred or even tax-free.
Final Thoughts
If there’s one theme that came out of this conversation, it’s control.
Real estate gives you the ability to control your investments, your income, and your taxes — something few other asset classes can match.
As Amanda and Matt reminded me, tax strategy isn’t just about saving money. It’s about building wealth faster by keeping more of what you earn. And the key is working with professionals who understand how to use the tax code creatively and strategically.