As a kid, Amanda Han hated real estate. As the English-speaking grandchild who would help her immigrant grandparents chase down tenants who hadn’t paid rent, “I just wanted a corporate job where I could type at a computer and get my nails done,” she recalls.

Han got her wish, working as an accountant at a Big Four accounting firm, where she met her husband, Matthew MacFarland. That’s when they noticed something striking: Nearly all of their wealthiest clients owned real estate. The reason? The US tax code is packed with perfectly legal loopholes that can save real estate investors well into the six figures—and those breaks only got bigger this year with the passage of President Trump’s One Big Beautiful Bill.

Problem is, many mom-and-pop investors have no clue that they’re missing out. To help, Han and MacFarland launched KeystoneCPA to share the “cheat code” they discovered as accountants, which also inspired the couple to start investing in real estate. Here are three loopholes investors often miss, along with one well-intentioned mistake to avoid.

The marriage loophole: If you’re married and at least one spouse earns a high W-2 or business income, certain real estate losses can offset those earnings if one spouse qualifies as a “real estate professional.” That person must spend more than 750 hours per year and more than half of their total work hours in real estate activities. They also must materially participate in their rental property. The IRS has seven “material participation” tests, which typically include managing properties, overseeing operations, and coordinating with tenants or contractors. In other words, probably stuff you’re already doing and had no idea were a tax write-off.

The Airbnb loophole: Short-term rental hosts (with average stays of seven days or fewer) can also use rental losses to offset W-2 or business income, even if they don’t qualify as a real estate professional. Similar “material participation” rules apply here, but since you don’t need to work on real estate for more hours than your day job, this strategy is ideal for side-hustle investors.

The lazy 1031 exchange: In a standard 1031 exchange, investors who’ve sold a rental can defer capital gains taxes by buying a new rental property. The “lazy” alternative is to put money into a real estate syndication that provides tax losses. If done in the same year of the gain, the syndication tax loss can curb capital gains taxes without needing to scramble to find a new property. “We see this a lot with clients who are older and don’t want to manage property anymore,” says Han.

But don’t do this: Aging parents often add their children to property titles. Han warns against it. “My mom added me to one of her rentals,” she says. “I told her to remove me.” The reason is the step-up in basis: a tax rule that resets an inherited property’s basis to its fair market value at the owner’s death. If you add kids to the title, they inherit the original (likely lower) purchase price, which can lead to a much bigger capital-gains bill when the property eventually sells.

Learn more about how real estate can help you save on taxes in 2025.

The gift coming after Christmas: Redfin predicts that rates will slide to an average of 6.3% for a 30-year fixed mortgage next year. Sure, that’s double the pandemic’s dreamy 3% rate, but still lower than it’s been in three years. Here’s more on what’s coming and how to prepare for the Great Housing Reset.

🪓 Chop, chop: Zillow found that nearly 27% of sellers axed their asking price in October. Although sellers trimmed $10,000 on average, one haircut was not always enough, which led to multiple discounts totalling $25,000…or even $50,000 off in these five cities.

America’s new boomtowns: Move over, Austin, TX. GOBankingRates found that people are flocking to a whole new set of cities. Don’t get left behind; find out your state’s boomtown.

Zillow is deleting data: The listing portal eliminated climate scores predicting a listing’s risk of floods, storms, wildfires, and extreme weather. Why? Some real estate agents and homeowners argued that poor scores were spooking buyers or were simply inaccurate. Still, if you’d prefer some ballpark odds over buying blind, here’s how to find your score now.

Rebuilding after a wildfire is tricky. The first home to receive its certificate of occupancy in the wake of L.A.’s January fires has sparked new controversy. Why? Because homeowners won’t be moving in. Find out the reason.

🛒 Bargain shopping? The WSJ explores how one highly unpopular real estate asset is becoming too cheap to ignore.

Why mafia mansions don’t sell: No, it’s not the property’s shady past. It’s the decor, obviously.

You’ll love the sound of this toilet upgrade. It’s called Otohime, or Sound Princess, and is already everywhere in Japan. But it’s catching on fast, since it’s designed to drown out awkward noises (and make you laugh).

Ski homes may be breathtaking winter escapes, but how do these powdery paradises hold up as investments? For the answer, we chatted with ski home and resort developer Eric Christensen of Lone Mountain Land Company in Big Sky, MT. Here’s his take, and the top mistake to sidestep when shopping for your own place.

Q: How did you end up building ski homes? “I started off building hotels in Disneyland Paris, Mexico, and the Caribbean. But I prefer the mountains; my wife and I love to ski, and our kids grew up racing in Tahoe. So eight years ago, I came to Big Sky to build hotels and homes for the Montage Big Sky and the One&Only Moonlight Basin.”

Q: Are ski houses good investments? “Our typical buyers aren’t pure investors, but someone who wants to spend a month or two in Big Sky and when they’re not there, rent it out to cover carrying costs and maybe get a return on investment. We also sell quarter-fraction condos. If it fits your lifestyle, it becomes such a nice thing.”

Q: How well do ski homes appreciate? “People who bought here pre-Covid have seen prices go up 50% because these units are scarce. Mountains are environmentally sensitive areas. Water is a big issue, since we have world-class fly-fishing streams, so you can’t produce unlimited wastewater. It’s not easy to get new projects entitled in mountain communities. That’s what makes them special, that you can walk out your door and hit 50 miles of wilderness.”

Q: What are the challenges? “The maintenance can be rough. Pipes can freeze. Bears can break in. It’s important to hire a property manager if you’re not there. It can also be challenging in remote markets to find contractors.”

Q: Any advice on finding a good ski home? “One of the things I always look at is the shape of the roof and where the snow is going to fall. Make sure it doesn’t drop on decks, hot tubs, or where people are exiting the house; my wife got hit with snow falling off the roof in Tahoe. We’ve also seen more geothermal ground-based heating, which is expensive up front but lowers propane bills. Whole-house humidification can also make you a lot more comfortable; there’s a big difference between humidity of 28% and 12%.”

Scroll down to check out two ski houses Christensen built that are currently for sale.

Once upon a time, back in the 1920s, Disney artists took their set-design skills beyond the studio lot and into local neighborhoods, creating a whimsical new style of architecture: the “storybook” home. That fairy-tale aesthetic is having a moment again, thanks to the recent $1.88 million sale of nine Culver City Hobbit Houses. The buyer, real estate agent Michael Libow, has dubbed himself the King of Storybook since he lives in his own Hansel-and-Gretel-style cottage in Beverly Hills, known as The Witch’s House.

Storybook homes have soared in popularity as a fanciful foil to modern, minimalist styles—but their high-maintenance upkeep makes them tricky from an investment standpoint. The Hobbit Houses, for instance, come with a 15-page report detailing everything that can’t be altered, from the facade to landscaping to interior furnishings, many of which were hand-carved by the original owner. But Libow is excited to preserve this property’s rich history, telling The Los Angeles Times, “This is my legacy: bringing a little bit of joy to as many people as I can…bringing a sense of awe and wonder to the world.”

Here’s a rare peek at these Hobbit Houses.