Las Vegas Condotel: Syndication and Bonus Depreciation Questions

[Geoff Prickett]

Questions for Real Estate CPAs and Attorneys (or genuine experts), preferably who know the Las Vegas Condotel market:

Looking at my first investment property. Considering going in with other investors on a condotel unit in Las Vegas.

Do condotels have anything different about them - as far as taxation/regulation/classification vs any other type of short term rental?

The big, pressing, motivator in my choosing to start with STR is my recent learning about the "STR Tax Loophole" and especially "bonus depreciation."


I am a (newly licensed) Real Estate Professional. My other investors are not. I will be managing all booking, renovation, and maintenance operations of the STR (besides mandatory front desk operations, and cleaning - required to be run by the Hotel). The other investors will be, out of state, passive investors.

I was thinking to create an LLC taxed as an S-Corp?

How will tax benefits break down? I know RE Professionals get better benefits than non. I know that participation in operations affects the tax benefit in some ways? How do I structure our entity to get everyone maximum tax benefits? What will their benefits look like vs mine? Will business expenses be deductible for all against other active income - or only for me?

How does bonus depreciation work? Will all the money put in during the the first calendar year qualify? (downpayment, closing costs, HOA fees, renovation, furniture...etc?) What's covered and what isn't?

Will depreciation and bonus depreciation be deductible for all investors? Will that deduction be usable to offset taxes from other income for them?

I know this is a lot. Thanks for any help anyone can give.

[Geoff Prickett]

Thanks Austin.

Are you available for a brief, paid, consultation? I appreciate the info provided so far, but I have more questions and I don't expect freebies from pros like yourself.

I'm looking to get together a semi-solid idea of how this all works before I drill down, in depth with my usual accountant in a couple weeks (if I still decide to drill down with my usual accountant after learning more info on what I'm trying to do - from you or someone else.)

My usual guy can't get to me right away and I'm in a time crunch, if this deal is going to happen the way I want it to (bonus depreciation decreasing by another 20% on Jan 1st)

I really just need to understand Bonus Depreciation, in detail, and as it applies to my situation.

I'm brand new to all of this. First deal of my life I'm trying to put together here.

I will have a syndication of passive investors, along with myself as the sole General Partner. I think you're telling me to go LLC?

Right now my dream is that 60% bonus depreciation means: my investors get 60% of their start up investment right back as a rolling tax credit - usable from year one? Even better, do they get to divide up a 60% credit on the entire value of the property, and furniture, and everything? Either of these scenarios are probably too good to be true, but I need to understand Bonus Depreciation and what I can promise my investors by leveraging it.

Also brand new to Bigger Pockets. How do we connect with each other for a consult?

Thanks.