Retirement Years Deduction Strategy - would love feedback
So, for a retiree who expects to have high income in retirement from non-CRE assets (pension, IRA's, dividends from large stock/bond portfolio, etc), I was thinking about the following strategy.  Buy a residential or other commercial property and set it up so you take a mortgage large enough, and maybe keep rents below market to keep it fully occupied with the primary purpose to have the mortgage interest deduction and the depreciation cover your aforementioned high income. ?  Am I missing something - seems like a smart strategy.  Thanks in advance!

Just to add, the idea would be to break even on the property with the high mortgage so as to not add additional income.  Just a tax-deduction play...
[{"id": "iflf8mq", "text": "Following,  would love to know how this goes", "replies": [], "depth": 1}, {"id": "iflgmoj", "text": "Afaik the depreciation can only offset your rental income.  Overall this is probably one of the dumbest ideas I have seen in this subreddit.", "replies": [], "depth": 1}, {"id": "ifllxcd", "text": "Unless you are a real estate professional this technique does not work. However, what can you do is if you want to put a downpayment into an asset and can calculate ur cash returns if you cost segregate you can use the depreciation an excess of cash flows otherwise known as a net operating loss and pro rate that out to prevent taxation on future cash flows. \n\nMy personal opinion is that if you have this basket of passive income adding a small apartment building or something of that nature would be a great way to diversify. \n\nHowever, I\u2019d consult with a tax person because I assume that IRA, pensions, and stocks all have interesting and varied forms of taxation especially if vested in retirement accounts that goes beyond ordinary income.", "replies": [{"id": "iflpvjf", "text": "Thank you - this is extremely helpful.", "replies": [], "depth": 2}], "depth": 1}, {"id": "iflu264", "text": "I'd like to hear others thoughts on this as well, but it seems like you'd be unretiring to manage a property (or paying someone to?) to save some money on taxes (so to make more money?). If youre trying to make more money, then try to make more money and not just try to break even to play games with the IRS, or am I missing something?", "replies": [{"id": "ifm6lyc", "text": "Hi - No you are not missing something.  Tax Shelter's are a thing.", "replies": [], "depth": 2}], "depth": 1}, {"id": "ifm29ex", "text": "You need a CPA that you can talk tax strategy that specializes in retirement. \n\nAs urlocaldrugdealer stated, you or your spouse need to be a real estate professional to pass property depreciation over to any other income. \n\nMy focus is syndication where depreciation is a big selling point to maximize cashflow. The downside is for most people it cannot be carried beyond the income made from that property.", "replies": [{"id": "ifm5tic", "text": "Thank you - this is very helpful.  Yes, I have a good accountant but wanted to get some industry feedback.  I am going to look into what the definition  of being a \"real estate professional\" is for the purposes of this depreciation pass-through.  Thanks again.", "replies": [], "depth": 2}], "depth": 1}, {"id": "ifmjgc4", "text": "Never buy property solely for the tax deductions...fundamentals win the day with tax upside only being the plus.\n\nBut for depreciation: Bonus is going away year over year...Accelerated depreciation is good and helps but there's a recapture and a taxable event when you sell unless you 1031 exchange (which in my opinion is the real wealth builder)..\n\nAnd, someone mentioned being a RE pro, which would allow you to offset stock gains with real estate losses but the test is 750 hours minimum per year. I suppose a retired person could credibly clear that hurdle with the IRS. It may be difficult for someone with a full-time job or a professional like a doctor to convince the IRS that they are a RE pro.\n\nAlso, consider a few things, for the commercial property, the income (and your lender) will generally decide how large a mortgage you'll receive. Right now many commercial lenders are maxing out at 65-70% LTV.. And for both commercial and residential..repairs, especially larger items like HVAC, parking lots or roofs pretty much will kill any tax savings with outlays of cash, which generally is sunk cost until you sell or you get reimbursed by a net tenant. Levering up without considering reserves and operations is a recipe for disaster..and if it's a bank deal, recourse provisions will put you at great risk.", "replies": [{"id": "ifmt72v", "text": "This is extremely valuable - thanks for the definition of RE pro - thanks!", "replies": [], "depth": 2}], "depth": 1}, {"id": "ifs1c3g", "text": "Buy equipments that generate revenue and depreciate?", "replies": [], "depth": 1}]