All Forum Posts by: Brendan August

@Nicholas Aiola

If I own a STR where the average rental is below 7 days and I do not provide substantial services am I still able to utilize the $25,000 passive activity loss allowance since the activity is treated as a trade or business and not rental real estate?

@Nicholas Aiola

If I do a cost segregation on my STR and use bonus depreciation am I able to use those loses up to 25k against my W2 income if my MAGI is under 100k or would I still need to prove that I materially participated?

@Nicholas Aiola

Thanks for the quick response. That is what I was worried about. We can't seem to figure out a way for activity to be nonpassive for both myself and my partners. 

If they work 500 hours combined then I can't claim that I worked 100 hours and more than anybody else lol. It doesn't seem like there is anyway that we would both be able to materially participate even though all of us are doing a bunch of working setting it up and managing it. 

@Nicholas Aiola 

Thanks for all the info you provide for us. I have a few questions regarding a short term rental I own with 2 other people (married couple). 

We are aware that STRs are not classified as rental income if they are rented for an average of less than 7 days which ours is. Since this is the case we would like to be able to write off the income against our W2 income and if we are able to do this then we would do a cost seg as well. Below is our situation. 

Married couple: AGI over 150k, one of them actively participated in the rental for at least 100 hours and more than anybody else. 

Me: AGI less than 150k 

Since I do not make over 150k am I still able to use these losses against my active income or do I also have to be able to demonstrate I worked over 100 hours in the property and no more than anybody else. Which isn't possible since my business partner will have worked more than me. 

Just trying to figure out a way to structure this so both myself and my partners can take advantage of the STR loophole.

@Nicholas Aiola Thanks for the recommendation! Just scheduled a meeting with him. 

@Nicholas Aiola Thanks for taking the time to do all this. I just purchased a home in Washington DC for nearly $800,000 that will be my primary residence for a year and that I plan to rent out after that. Would I be able to do a cost seg analysis on it after the first year once I put it into service as a rental, or is that something I need to do within the first year of owning it (which I wouldn't be able to do since it is my primary residence)? 

Thanks and if anybody has any recommendations for residential cost seg companies that would be great. 

Thank you everybody for the responses! @Amanda Gant thank you for the advice we actually were able to add a 5th bedroom to the property so that is our plan. I would love the opportunity to be able to pick your brain about any advice you have working with HCVP. 

@Russell Brazil Thanks for the response. Yea I had never heard this brought up before and I actually was able to ask Dr. Joe on a webinar recently and he had never heard of it either. I've been trying to get in contact with DCHA so once I do I'll be sure to share what they say. 

I was doing some research into the DC Housing Authority requirements and I came across an article in their code that stated the minimum occupancy for a 5-bedroom home is 10 people. I've attached a screen shot of it. Does anybody have experience with this and if so do they actually require 10 people to live in the home? Perhaps this is how the voucher program works and I am just missing something. To receive a 5-bedroom voucher you have to have 10 people in your family? This seems like a lot of people in one property to me.

@Richard Mollel Thanks I'm hoping it is similar for DC! But yea the DC Housing authority website actually has 2 prices listed. One for "with utilities" and one for "without utilities". It looks like the difference between the 2 increases as the amount of bedrooms increase but a 4 bedroom rents for $255 more if the landlord provides utilities. Definitely doesn't seem worth the risk to do that though.