A caller asked what he should do to offset the tax penalty if he withdrew his $100,000 IRA. Del described how to use depreciation to reduce the tax burden as much as possible
“What I tell people to do is to pull your IRA money out early in the year… January, February, March… something like that so you have a whole year’s worth of depreciation to take against it. Second, buy yourself as large a property as you can, as leveraged as you can, so you are going to have a lot of real estate to depreciate. Third, I would use something called “cost segregation”. Cost segregation is going to double, if not triple, the amount of deductions you can take…”
