Tax Smart Real Estate Investors Podcast

Episode: 2026 Tax Strategies You Can’t Ignore (And What You Can Still Do for 2025)
Date: December 30, 2025
Host: Hall CPA (Tom & Nate)

Episode Overview

This end-of-year episode dives into crucial tax strategies for real estate investors heading into 2026, with actionable guidance on what can still be done for 2025 filings. Tom and Nate break down what’s changed, what’s sunset, and what opportunities and “loopholes” remain for maximizing tax savings. This is a practical guide for investors—both small-time and large-scale—looking to keep more of their gains and set themselves up for optimal tax efficiency.

Key Discussion Points & Insights

1. Year-End Actions: What Can You Still Do for 2025?

• IRA and HSA Contributions
  • Still possible for the 2025 tax year if completed by the April 15, 2026 deadline.
  • “You can still do that… you just need to do it before your tax return gets filed.” (D, 02:05)
• Cost Segregation Studies
  • Can be completed after year-end—but property must have been acquired and placed in service by December 31, 2025, for 2025 tax benefits. (C & D, 03:48–05:11)
  • For short-term rentals: Need at least a couple guest nights at market rate before year-end.
  • “You would have to have your property in order to apply it to the 2025 tax year... acquired and placed in service before the end of 2025.” (C, 04:08)
• Missed the Deadline? Not All Is Lost
  • Strategies often involve timing differences; missing 2025 doesn't eliminate future opportunity, but defers it.
  • “Just because it didn’t work for one year doesn’t mean we’re out. That means our 2025 tax return isn’t going to be as juicy potentially… You have to wait a little bit.” (D, 05:11)
• Qualified Opportunity Zones
  • Briefly teased as a possible late-inning move, but detailed later.

2. Top Tax Strategies for 2026

• Short-Term Rental ("STR") Loophole
  • Continues as a leading strategy: acquire property, maintain average stays <7 days, materially participate, use cost segregation for major losses to offset W2/active income.
  • “Short term rental strategy… still alive and well and will probably remain one of the top tax strategies for people who are doing real estate part-time and not able to qualify for real estate professional status.” (C, 07:09)
• Oil & Gas Funds
  • Attractive for late-year or high-income investors seeking non-passive losses.
  • Must thoroughly vet managers; don’t let “tax tail wag the dog.”
  • “It's actually one of the few strategies that you don’t have to do anything except make the investment and be able to take the losses as non-passive.” (C, 09:29)
• Real Estate Professional Status (REPS)
  • Remains unchanged and powerful for long- and mid-term rental investors.
  • 100% bonus depreciation also stays in play.
• 1031 Exchanges
  • Still a workhorse for tax deferral, but with tight timelines and complexity:
    • 45-day identification, 180-day closing, strict property rules.
    • “1031s… are fantastic. They’re great at tax deferral, but that’s all they’re really good for.” (D, 10:59)
  • Alternative: “Lazy 1031”
    • Sell property and buy another in the same calendar year, use cost seg and bonus depreciation to offset gains.
    • Greater flexibility than standard 1031, but must occur within same tax year. (C, 11:53–13:06)
• S Corporations
  • Still viable for small business owners to save on self-employment taxes.
  • Watch for state-specific restrictions (notably California, NY).
  • “Tax wise, we don’t care… Federal tax perspective, they don’t care where your LLC's set up. The state might call it illegal. That is your risk.” (D, 16:55)
• Retirement Accounts & “Shadow Contributions”
  • Still available for 2026. Details not deeply covered, but stability noted.

3. Qualified Opportunity Zones (QOZs) and 2026-27 Rule Changes

• Recognizing Deferred Gains
  • 2026: All previously deferred capital gains in QOZ funds become taxable.
  • With K1/partnership investments, some may be able to “hop” that gain into 2027.
  • “This is when the piper comes to pay… you might be able to… redefer all those gains potentially.” (D, 14:00)
  • 2027: New rules trigger 5-year gain recognition cycles and 10% step-up.
• Strategic Implication:
  • Partnership/K1 investors have more “date” flexibility for reinvestment.
  • “Long story short, there is an opportunity to take advantage of new 2027 rules potentially.” (D, 15:57)

4. What’s No Longer Available (Sunset in 2025)

• Charitable Contributions Haircut
  • “Half percent AGI rule” applies from 2026: loses a portion of deductible charitable contributions as AGI rises.
  • Non-itemizers now able to deduct cash contributions, fresh for 2026.
• Residential Solar Credit
  • 30% federal tax credit for solar panels on primary residences ends after 2025.
  • “Solar panels on primary residences. That is gone after this year. There's no longer an option in 2026.” (D, 18:46)
  • Business solar credit still available through 2027.

5. Other Memorable Moments & Lighter Segments

• STR Last-Minute Guest Stays:
  • Jokingly offering to fly themselves in as guests to meet participation rules
  • “If you need someone to come stay at your Airbnb… Tom and I will come stay there for your last day.” (D, 06:20)
• Automation & The Future:
  • Speculation about same-day robot installation for solar panels in the future (20:05-20:58).
  • Robot guard dogs in insurance world, powered by—wait for it—solar panels.
• Closing Thoughts:
  • Encouragement to set goals for 2026, stay proactive, and consult accredited advisors.

Notable Quotes & Timestamps

• On STR strategy for high-income W2 earners:

  “Short term rental strategy… still alive and well and will probably remain one of the top tax strategies for people who are doing real estate part time and not able to qualify the real estate professional status.”
  — Tom, (07:09)

• On timing and year-end urgency:

  “You can get your cost seg done in January, in February, in March, in April, in May, in June… you just need to do it before your tax return gets filed.”
  — Nate, (02:05)

• On 1031 Exchanges’ limitations:

  “1031s, I call them golden handcuffs because they are fantastic… but that’s all they’re really good for is tax deferral.”
  — Nate, (10:59)

• On the “Lazy 1031”:

  “You can literally buy the property now and sell your property later on down the year or vice versa… as long as you can get it done in the same tax year.”
  — Tom, (11:53)

• QOZ rule change humor:

  “This is when the piper comes to pay, right? This is when you got to pay the… pay the piper.”
  — Nate, (14:00)

• On S-Corp state legalities:

  “Federal tax perspective, they don’t care where your LLC set up. The state might call it illegal… that is your risk.”
  — Nate, (16:55)

• On residential solar tax credit ending:

  “Solar panels on primary residences. That is gone after this year. There’s no longer an option in 2026.”
  — Nate, (18:46)

Timestamps for Major Segments

• 2025 Actions You Can Still Take: 01:47–06:55
• Key Strategies for 2026: 07:09–18:04
• QOZ & 1031s Deep Dive: 10:59–15:57
• What Sunsets After 2025: 18:04–19:51
• Lighter/future-looking segment (automation): 19:51–21:06
• Closing/Outlook for 2026: 21:06–22:41

Final Takeaways

• Most top real estate tax strategies (STR loophole, REPS, 100% bonus depreciation, S-corps, cost-seg, oil & gas) persist into 2026.
• Some key benefits sunsetted after 2025: residential solar, certain charitable deductions.
• Plan proactively and stay informed—timing, compliance, and proactive advisor engagement make the difference.
• QOZ funds face a crucial taxable event in 2026, with new hopping strategies possible for some.

Hosts sign off with actionable encouragement:

“The sooner you have clarity on what your tax strategy is going to be, the more time you have to do it, the more money is on the table to potentially save.”
(Tom, 22:21)

Useful for all real estate investors and business owners—act now, know your deadlines, and keep optimizing!