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Updated about 1 year ago on . Most recent reply
2023 STR Cost Seg -> 2024 MTR/LTR conversion implications?
I am considering a strategy where I buy a STR in 2023 (do cost seg + bonus depreciation on it), then convert it into an MTR/LTR next year. My CPA said that this has never been done before, nor does he recommend doing it. Curious if anyone has actually tried it.
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#1 Medium-Term Rentals Contributor
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#1 Medium-Term Rentals Contributor
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Quote from @Michael Plaks:
It has been done before many times.
Tax professionals' opinions on whether or not it is a legitimate strategy will vary, because it is grey area. In other words, I'm not aware of a definitive prohibition against it, but am aware of various theories on why it could be considered abusive y the IRS.
I'm curious about your theories on this. Would you mind elaborating? I haven't given this much thought, but with more people struggling with their STRs in certain markets and trying to pivot to MTR I could see this being a valuable topic