buying an STR with a partner

[Tyler Neison]

My dad and I are looking into buying a STR property in Florida. We both want it to use as personal vacation property when we go down, but I'm predominately interested in it for the active loss tax benefit. Given some of the qualifying rules, such as "you must spend more time than any other person", I would assume he and I both would not be able to utilize the benefit of the active loss scenario? Would the losses be classified as passive losses for him, meanwhile mine are active-- assuming I meet the requirements...?

[Ana Garcia]

@Tyler Neison Generally, both you and your dad would report the income or loss from the rental, based on the ownership percentage. One thing to note is that, in order to take losses on your taxses, your income must not exceed a certain threshold, and if it does exceed the threshold, you and your dad may still deduct the losses if you qualify as Real Estate Professionals (there are other rules for this). Losses that are not deducted can be carried forward indefinitely to years when you report a profit. 

Keep in mind that you and your dad would report the income or loss from the property based on your ownership %, but your dad may take losses and you may not. What happens at the personal level depends on each of your personal tax situations.

Hope this helps.