Real Estate Professional - Accelerated Depreciation - AMT

[David R.]

Some background: I have a high W2 income (top tax bracket) and my wife qualifies as a Real Estate Professional.

We started investing in RE this year (3 SFH) and I have been looking at the option of accelerated depreciation.

If I apply the accelerated depreciation, it would create a loss of ~$150k in 2020; in theory, as married filing jointly we could map that loss against my W2 income (wife is REP). However, I'm not sure how the Alternative Minimum Tax (AMT) will impact this strategy.

Has anyone been in a similar situation in the past, did AMT nullified the tax benefits of REP? my accountant is not too familiar with this (I would appreciate also RE CPA recommendations).

[I'm comfortable with the RPE requirements and the accelerated depreciation process and cost, the only concern is AMT]

Thanks

David

[Yonah Weiss]

@David R. with accelerated depreciation AMT is almost never relevant, especially if you're taking 100% bonus depreciation. We include the alternative calculations in all of our reports, but since the laws have changed, 99% of the time it's not relevant.