Allowable to purchase a primary with a detached ADU, cost seg just the ADU

[William C.]

Wild idea based on a property in my local market. Is it allowed to purchase a property with our primary home that has a detached ADU on the same tax lot. Live in the primary. Rent out the ADU as a STR (7 day stays or less). Perform a cost seg study on JUST the ADU. Anyone out there with experience in a similar situation? Thanks for taking a look.

[William C.]

Quote from @Sean Graham:

Quote from @William C.:

Quote from @Sean Graham:

Quote from @William C.:

Wild idea based on a property in my local market. Is it allowed to purchase a property with our primary home that has a detached ADU on the same tax lot. Live in the primary. Rent out the ADU as a STR (7 day stays or less). Perform a cost seg study on JUST the ADU. Anyone out there with experience in a similar situation? Thanks for taking a look.

Yes. This is common in California  

Thanks for the reply. Any tax knowledge of if people doing this strategy are able to take the losses from the cost seg study (on the ADU) to offset their W2 income? This would be via STR loophole, not REP status.

Yes, absolutely! Here is a podcast episode I recently did with BP on this 
https://www.biggerpockets.com/blog/rookie-521

Thanks! On it. Going to give this a listen and get back with you.