All Forum Posts by: Benjamin Weinhart

Piggy-backing off of Zach a little, it's very useful to have a business checking account for organizational purposes. I'd suggest looking for one with low-no fees as you're getting started out. You may also find it useful to get a business credit card as well for the same reason.

Hi Luis, you have a very interesting problem. We can give suggestions here, but you're at the point where it is 1,000% worth it to schedule a planning meeting with a professional. They may only charge a few hundred or few thousand depending on how involved it is whereas you could save multiple orders of magnitude of what they charge in savings/deferrals. They'd be able to give a lot more personalized advice versus what you might find on public forums such as these.

That being said, there's a variety of strategies you might be able to employ. It kind of depends on what your goals are, but you may be able to start consolidating your properties a little more with like-kind exchanges and/or purchasing larger properties where you could do cost-segregations on. Assuming you don't want to create additional management work for yourself, it's possible that higher value properties may give you the advantage of the higher capital outlay without additional work. The drawback of course is that you may be looking at smaller returns %-wise. Depends of course on how the deals work out.

You want an LLC for ease of administration, trusts are kind of annoying as they can act as their own taxable vehicles as opposed to single-member or pass-through entities that an LLC can provide. A trust is a more expensive route to go administratively (mostly amount of headache), but there's a good chance you don't really need an LLC anyway as you may not get the limited liability aspect depending on how you operate the properties. For many folks in your position, the only real advantage to an LLC is if you want the pass through entity with a partnership/S-corp or the anonymity aspect. This may be more of a question for a lawyer, but from a tax perspective, that's my input.

It's also worth looking at the sec. 121 home sale gain exclusion to see if it might be something you qualify for in order to take advantage of the exclusion amount since you mentioned it was a previous primary residence.

Agreed with Arn, while it's still theoretically possible, my thoughts are that they would've done it by the beginning of April at the absolute latest. That's not to say it might not get reinstated for tax year 2024, but I am 99.99% certain that there will be no additional movement for 2023.

Agreed with Chris. I'm getting a lot of folks who are looking at a similar path or who may have already done it and don't realize all the added compliance. Unless you're filing the tax returns yourself (not possible to e-file a partnership return if not a preparer), then the cost is usually a large barrier for a lot of people as they're starting out. This is likely something you'd want to revisit in 10 years rather than now.

I know you mentioned the anonymity portion, is this worth potentially spending $2-3k per year or more for? And that's not including any extra state tax you might pay.

You would not be able to be classified as "materially participating" under what you propose, you must meet a couple of criteria to be considered including 100hrs+ spent on the business and more time than anyone else. For the income to switch to Sch C reporting, you also need to offer services similar to that which a hotel might offer such as daily housekeeping, food/drink, and potentially various other amenities depending on how you'd like to qualify.

What you describe is simply changing property managers, it doesn't really matter whose name is on the AirBNB listing. It more matters about who is doing what specifically at the end of the day. You can still do a cost segregation study (assuming timing isn't an issue), but the cost of the study may prove to be more costly in the long run for you than just taking regular depreciation on the property.

I think we are probably past the point of doing bonus depreciation retroactive for 2023. I could see them implementing it for 2024 still with the ability to depreciate the remaining basis on a property that was 80% depreciated in 2023, but it's likely a bit much to have everyone go back and correct 2023 at this point. I still stand by that we won't see any major tax legislation this year since the TCJA expires in 2025, not 2024.

 It wouldn't be, but it's also a fund made up of US Treasuries, so you get practically the same amount of insurance since both are backed by the US Govt. Just has an extra step for the MM fund.

 I think the creative answer here is if you get one of those driving school cars with 2 steering wheels and 2 sets of pedals. Would probably just be a 50/50 split in that case though :)

 So long as you don't mind working with a remote-based CPA, the country is your oyster. Many of us are scattered around the US but practice in many different states since our license doesn't limit us to just our state like a lawyer's might otherwise. I want to say I have clients who file returns in ~15 different states all together, but I've filed at least one return in almost all 50 before (I think I'm missing AK and WY to complete my 50-state map haha).