Podcast Summary: Year-End Tax Planning 2025 – What Every Investor Should Be Doing Now

Podcast: Tax Smart Real Estate Investors Podcast
Host: Tom (Hall CPA)
Guest: Justin Shore, EA
Episode: 351
Date: October 28, 2025

Overview: Main Theme and Purpose

This episode dives into critical year-end tax planning strategies for real estate investors as 2025 draws to a close. Host Tom and guest Justin Shore, EA offer actionable guidance on vehicle deductions, the latest changes to bonus depreciation, short-term rental loopholes, real estate professional (REP) status, cost segregation, the expanded SALT deduction, and practical year-end moves like tax loss harvesting and entity management. The tone is practical, fast-paced, and packed with caveats and real-life examples. The goal: Help investors save thousands, avoid rookie moves, and position themselves for 2025 tax success.

Key Discussion Points & Insights

1. Vehicle Deductions for Real Estate Investors

Timestamps: [04:28 – 06:25]

• Maximizing Vehicle Deductions:
  • Purchase a qualifying vehicle (ideally >6,000 lbs GVWR) and use it primarily (ideally >95%, must be >50%) for business.
  • Bonus depreciation is back to 100% for 2025—potential for a full write-off of purchase price and associated expenses.
  • Year-end purchase is strategic: Deduction is based on business use in the first year.
• Caution: Don’t buy a vehicle just for the deduction. “You don’t want to let the tax tail wag the dog.” (Tom, [06:25])
• Pro Tips: Trucks, full-size SUVs, many crossovers qualify. Check manufacturer specs.

2. Short-Term Rentals (STR) – Can You Still Make it Work in Q4?

Timestamps: [07:43 – 09:48]

• Can you still pull off STR eligibility for tax benefits before Dec 31?
  • Yes, but it’s a “heavy lift.” Need 100 hours of material participation (spouses can combine).
  • Memorable Quote: “If we really plug away on this, we do a lot of the setup ourselves… two people realistically could get 32 hours in one weekend…” (Justin, [08:09])
• Requirements & Nuances:
  • Get at least 2 guest days (paying, arm’s length guests).
  • Document your time obsessively.
  • Focus on making wise investments, not just chasing tax deductions.
  • Bonus depreciation timing warning: If your property was under a binding contract before Jan 20, 2025, you may be limited to 40% bonus (not 100%).
    • “I didn’t think that 19 days [in January] was going to make that big of a difference, but it has for quite a few people…” (Justin, [09:48])

3. Real Estate Professional Status (REPS)

Timestamps: [10:38 – 13:31]

• Difficult to Achieve at Year-End: “If you’ve not already started… getting it starting fresh from end of October… is maybe not impossible, but extremely challenging.” (Tom, [10:38])
• Subtlety: Placing a property "in service" doesn’t require a tenant to move in; it just needs to be ready and listed.
  • STRs REQUIRE actual guest stays to qualify (<7 days average).
  • “That’s been established by a lot of case law over the years.” (Justin, [13:23])

4. Cost Segregation Study Timing

Timestamps: [14:18 – 16:08]

• You DON’T need to complete your cost seg study before Dec 31.
  • You have until your 2025 tax return filing date (in 2026).
  • Be cautious if passive—grouping and hour requirements apply if you want to offset active (W2) income via REPS.
• Syndicate/Fund Investment Loophole:
  • Investing in syndicates/funds near year-end can generate paper losses for deduction—works if you meet the 500-hour material participation test and group your activities.
  • Don’t jump into risky deals “just to get the tax savings.” (Tom, [16:08])

5. SALT Deduction Expansion

Timestamps: [17:11 – 19:13]

• SALT (State and Local Tax) cap increased: From $10,000 to $40,000 for AGIs under $500k (married filing jointly).
  • Phase-out between $500k–$600k AGI.
  • “If you’re… able to generate $100,000 of losses and offset W2 income, that’s great—saving roughly 32%... That also might… increase your itemized deductions… as high as $40,000” (Justin, [18:19])
  • Especially relevant for taxpayers in high-tax states or high property tax jurisdictions.

6. Year-End Basics & Classic Plays

Timestamps: [19:13 – 24:29]

• Tax Loss Harvesting:
  • Sell losing investments to offset gains or reduce up to $3k of ordinary income.
  • Beware the wash sale rule (don’t buy back within 30 days).
  • “Do not let the tax tail wag the dog.” (Tom, [19:50])
• Retirement Accounts, HSAs, and Timing:
  • 401(k)/403(b) employee deferrals must be made by 12/31.
  • IRA and HSA contributions can be made up to 4/15/26, but HSAs must be OPENED by 12/31/25.
  • Solo 401(k) and SEP nuances—employer contributions can go through return date.
  • “If you’ve ever closed on a piece of real estate between December 20–31… I’ll never do that again.” (Justin, [24:04])

7. Documentation and Bookkeeping

Timestamps: [24:40 – 25:52]

• Year-end is the time to get organized: Pull together expenses, receipts, rental records, mileage logs, and up-to-date bookkeeping.
• Critical for smooth filing, eligibility for deductions, and working with a CPA.

8. Advanced/Bonus Topics

Paying Kids/Family from Your Business

Timestamps: [25:52 – 27:35]

• Yes, you can pay your children reasonable wages for legitimate work—track hours, duties, and pay a “reasonable” rate.
• File W-2s by January 31.
• “Don’t go out and pay your kid $10,000 before December 31 and they’re only 5 years old and didn't actually work…” (Justin, [25:54])

S Corporation Considerations at Year-End

Timestamps: [28:01 – 30:36]

• Review your reasonable compensation—if you’re an active S Corp owner, you must run payroll and pay yourself a W-2 salary.
  • Truing-up wages at year-end may require paying a lump sum.
  • If you just discovered S Corps, get ready for 2026.

Highlighted Quotes & Memorable Moments

• “You don’t want to let the tax tail wag the dog.”
  —Tom, multiple times throughout episode ([06:25], [19:50])
• On STR Q4 push:
  “Two people realistically could get 32 hours in one weekend… if you really plug away on this.”
  —Justin, [08:09]
• On short-term rentals and contract dates:
  “I didn’t think that 19 days [in January] was going to make that big of a difference, but it has for quite a few people…”
  —Justin, [09:48]
• On cost seg timing:
  “You have up until you file your tax return in 2026 to do a cost seg study.”
  —Tom, [14:18]
• Practical warning:
  “If you’ve ever closed on a piece of real estate in that window, December 20th-31st. I’ll never do that again… a lot of people… are not in the office.”
  —Justin, [24:04]
• On S Corp salary:
  “You don’t want to just pay yourself a $5,000 W-2 in December and call it good.”
  —Justin, [28:28]
• Final advice:
  “The devil is always in the details and don’t want to make any missteps… thinking that the tax benefits are going to be there for you when there might have been a detail that… you can’t proceed the way you thought.”
  —Tom, [30:40]

Timestamps for Important Segments

| Topic | Timestamp | |--------------------------------------|------------| | Opening + Year-End Planning Thesis | 00:38–01:40| | Vehicle Deductions | 04:28–06:25| | Short-Term Rentals Q4 | 07:43–09:48| | Bonus Depreciation Timing | 09:48–10:38| | Real Estate Professional Status | 10:38–13:31| | Cost Seg (and Grouping Exceptions) | 14:18–17:11| | SALT Deduction Update | 17:11–19:13| | Tax Loss Harvesting | 19:13–20:54| | Retirement Accounts, HSAs | 20:54–24:29| | Documentation & Bookkeeping | 24:40–25:52| | Paying Children from Your Business | 25:52–27:35| | S Corp Year-End Considerations | 28:01–30:36| | Recap/Closing Caveat | 30:40–31:19|

The Bottom Line: Actionable Takeaways

• Start now: Don’t wait until late December—most strategies (business, retirement, STRs, etc.) require advance setup or documentation.
• Align tax moves with real business needs: Don’t make decisions solely for tax reduction.
• Proper planning and timely execution—especially with vehicles, STRs, S Corp payroll, and grouping elections—can provide substantial tax savings for RE investors in 2025.
• Always, always consult your tax advisor or CPA before implementing!
  "We try to give as much detail as possible, [but] we'll never be able to practically give every single nuance..." (Tom, [04:10])

For official resources and more details, visit therealestatecpa.com/podcast