How to defer US taxes • Hacker News Board

Re: How to defer US taxes

#181

Post by jt2190 » Sat, Mar 21, 2026, 1:45 PM UTC

SilasX wrote: post #20

jt2190 wrote: post #6

Earlier quoted context omitted.

Can you elaborate? As a business owner in the U.S. I can opt to reinvest all revenue back into the business, thus would show zero net profit but (presumably) increase my company’s value. (And remember there are other taxes and fees paid to various governments, not just tax on income/profit, so it’s not typically like nothing gets paid.)

>As a business owner in the U.S. I can opt to reinvest all revenue back into the business, Not entirely, no. Any of those reinvestments that count as capital expenditures aren't immediately deductible, but only on a throttled schedule, which is why the concept of depreciation exists in tax law: https://news.ycombinator.com/item?id=15061439

I think I said that?

> … it’s not typically like no taxes get paid.

This is why I asked for elaboration: The poster was unclear about how, say, making capital improvements (and getting taxed on those over time) would somehow look suspicious to the IRS, as it seems like this is an extremely common practice. I assume it’s not that then, but something else which I’d love for the poster to share.

Re: How to defer US taxes

#182

Post by asdff » Sat, Mar 21, 2026, 5:14 PM UTC

dataflow wrote: post #144

asdff wrote: post #101

Earlier quoted context omitted.

When do we finally hit the cliff? Deficit has been going up for decades.

> When do we finally hit the cliff? When you can't pay the interest anymore?

Just add it to the deficit.

Fact is US is able to run up 39 trillion and counting in debt because it prints the god damn monopoly money. No one would offer a loan to someone with that financial history. Shit really went off the rails after Bretton-Woods, huh?

Re: How to defer US taxes

#183

Post by SilasX » Sat, Mar 21, 2026, 5:40 PM UTC

jt2190 wrote: post #181

SilasX wrote: post #20

Earlier quoted context omitted.

>As a business owner in the U.S. I can opt to reinvest all revenue back into the business, Not entirely, no. Any of those reinvestments that count as capital expenditures aren't immediately deductible, but only on a throttled schedule, which is why the concept of depreciation exists in tax law: https://news.ycombinator.com/item?id=15061439

I think I said that? > … it’s not typically like no taxes get paid. This is why I asked for elaboration: The poster was unclear about how, say, making capital improvements (and getting taxed on those over time) would somehow look suspicious to the IRS, as it seems like this is an extremely common practice. I assume it’s not that then, but something else which I’d love for the poster to share.

Your comment made it sound like any re-investment back into the business would count as a cost that then cancels the profits that would be taxed. Even with your clarification, it still sounds like that. This is orthogonal to taxes that would be levied on things other than profit.

Re: How to defer US taxes

#184

Post by kccqzy » Sun, Mar 22, 2026, 1:10 AM UTC

KennyBlanken wrote: post #137

kccqzy wrote: post #108

Earlier quoted context omitted.

This is exactly why many people became landlords, but changed their mind and found that there is no way out. You might decide one day to buy some investment property, but after a few years when you lost interest in the pursuit, quitting would actually give you a huge tax headache in the form of unrecaptured section 1250 gain. This is unfair. You can quit a W-2 job or a hobby without tax consequences.

Buying an investment property isn't a job. It's an asset, that possibly generates income. That is not a job. That's an investment. A W-2 job isn't an investment. It's a job. A hobby isn't a job or investment, it's a hobby. You absolutely do have tax consequences if quitting the hobby involves selling equipment, particularly if that equipment was something that has to be registered, like a boat, car, ATV, etc.

It is a job. You need to manage and select tenants and handle repairs and maintenance. Managing one rental property is like a part-time job. But W-2 jobs may be part time too. It’s not like an REIT.

There are no tax consequences for quitting a hobby because you can’t deduct any expenses for hobbies in the first place, let alone any depreciation for these equipment.

Re: How to defer US taxes

#185

Post by evrydayhustling » Mon, Mar 23, 2026, 1:43 PM UTC

kccqzy wrote: post #108

jeffreyrogers wrote: post #9

Pretty good overview of how/why these deductions reduce your taxable income. Couple of things to note. Depreciation is recaptured if you sell an asset for more than its depreciated basis. People sometimes get into trouble with this if they rapidly depreciate real estate and then sell it. Even if you sell for less than your purchase price it is possible to owe taxes. You also aren't going to be able to pay no taxes si…

This is exactly why many people became landlords, but changed their mind and found that there is no way out. You might decide one day to buy some investment property, but after a few years when you lost interest in the pursuit, quitting would actually give you a huge tax headache in the form of unrecaptured section 1250 gain. This is unfair. You can quit a W-2 job or a hobby without tax consequences.

If I understand this correctly, the pain is because you depreciated the assets in the first few years, offsetting other tax liabilities, and now you must pay those back even if exiting the properties at a wash?

If so, it seems like the unfairness is in the other direction: landlording allowed you to essentially pull forward a tax credit, which a W-2 job doesn't allow.

Re: How to defer US taxes

#186

Post by voxic11 » Mon, Mar 23, 2026, 3:38 PM UTC

Spivak wrote: post #180

alphawhisky wrote: post #166

Earlier quoted context omitted.

This fact has me foaming at the mouth rn.

Why? Inheritance taxes are kinda stupid anyway, you already taxed it when it went to the parents, taxing again when moving those assets to next of kin is double dipping. I can understand step up being considered unfair but the alternative is someone inheriting their family's stuff and getting slapped with a potentially huge tax bill they don't have the cash to afford.

Well I think the idea is it wasn't already taxed in many cases. If you have assets that have greatly appreciated then that appreciation was never taxed.