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Optimize Your Taxes Like a CPA with Ryan Bakke
In this episode of the Short Term Show, host Avery sits down with tax expert Ryan Bakke to discuss how real estate investors can benefit from tax advantages, including real estate professional status (REPS) and material participation. Ryan shares his story of how understanding real estate tax strategies changed his career and life.
Avery:
Hey guys, welcome back to the Short Term Show. Today we have a very special guest.
Avery:
Ryan Bakke is an expert in all things taxes related to real estate, specifically short-term rentals. He has a few companies, MLS Consulting and Learn Like a CPA. Let’s let Ryan introduce himself.
How’s it going, Ryan?
Ryan:
Good morning, Avery. Good morning, everyone. My name is Ryan. I have a background in accounting and finance. I went to school for those two degrees.
Ryan:
I got into real estate once I entered the working world and realized something: people who invest in real estate live under a different set of rules compared to those who don’t.
Ryan:
I remember my first CPA job where I did a tax return for a married couple who had earned about $250,000 as W-2 employees. Then I did a tax return for a single guy who had around $400,000 in cash flow from apartment buildings in Chicago.
Ryan:
What blew my mind was that this single guy paid less in taxes than the married couple, even though he made double their income.
And he was single, so he was in a higher tax bracket!
I asked my boss, “How is this possible?”
Ryan:
My boss’s response was simple: “It’s because he invests in real estate.” That moment changed my life. I became obsessed with figuring out how this was possible.
Ryan:
That’s why I’m here today. I left corporate America to help people—not just anyone, but families who can change their future through wealth building, primarily via real estate.
But, I’m also not saying you have to give up everything else like using businesses or retirement accounts.
Ryan:
I believe stocks and other investments can be part of an early retirement strategy too, but real estate is where the power lies for real wealth building.
Avery:
That’s awesome. Let’s dive into this quickly. If you haven’t listened to the Amanda Han and Matt MacFarland episode, go check it out for a deeper dive.
Avery:
Ryan, can you explain what real estate professional status (REPS) and material participation are for those who might not be familiar?
Ryan:
Sure! Real estate professional status, or REPS, allows real estate investors to take full advantage of tax benefits. Material participation relates to how involved someone is in managing their properties, which ties into important tax rules like the short-term rental loophole.
