All Forum Posts by: Dan Lucchesi

 Thanks for sharing. This is great intel. 

https://engineeredtaxservices.com/services/cost-segregation?ref_id=qymngls

Here is the link to Engineered Tax Services info about their cost segregation services. 

 Ben, we just completed a Cost Seg on one property with Engineered Tax Services. We had interviewed 4 companies. All of their pricing was similar, although two were less (including Engineered) and two were more. What stood out about Engineered Tax Services was that Charina Padilla helped us out above and beyond. Three of the four companies followed up with us to ask if we were still interested in engaging them / a cost seg. I told each that our challenge was that we needed to consult with our CPA to make this decision - but we needed a NEW CPA because our prior one kind of stunk and didn't understand Cost Seg. and was against it. Charina was the only one who made the effort to help us fine a great new CPA. Our new CPA helped us decide to do one of our two properties and now the Cost Seg is done. I'm very happy with Engineered Tax Services. 

 Do you mind sharing what your Craig's List post looks like? We own and manage two and one is particularly difficult during the shoulder (slow) seasons. We've never advertised. We do lower rates, and I'm curios if others have run into a "floor price" below which you just get problem guests. We've observed a certain and different price at each place that below which we get difficult guests. It never ceases to amaze us how at one for example, we peak at $400/night with solid 5 star reviews. Then in the slow season we are at $119/night and people complain about the value and little ticky tack things that no one complains about above $200/night. 

As others have already said, you definitely can remain the host and make another party the co-host, but then allow them to do all the guest communication, pricing, booking, etc.

The only tax implication I would say is that I'm sure you will be paying the co-host something. Their expense is simply another business expense like the utilities, taxes, insurance, supplies, HOA, etc. So, it will reduce your net income and therefore your taxable income. But, that is the only tax implication of engaging another host.

 Thanks Zach. That is good perspective. 

 HAHA. I've always tried to avoid the many ways that cause the public to hate us. I would welcome a much higher barrier to entry for our industry. What other industry dealing with hundreds of thousands of dollars of people's money lets people become licensed in three weeks and no formal education? 

I have been investigating having cost segregation studies done to two STR investments I own. I'm getting some pushback from my CPA of several years. He is a former IRS auditor, before going out on his own. He is definitely more conservative in his advisement, but seems willing to go along with defensible positions that fall within the tax code. We are taking advantage of two new tax saving opportunities that require some additional research and paperwork on our end. We provided that and he was happy to get on board with those strategies. But, he seems very concerned about the prospect of doing Cost Segregation for the depreciation on these two properties. Our original and adjusted basis on each property falls in the $400s and the Cost Seg studies are being quoted in the mid-$2,000 range per property. Our CPA has suggested that Cost Seg is for investors with millions invested in real estate, and more predominately on the commercial RE side. He has suggested that this may be more of a red flag to the IRS. Furthermore his point is that regardless that this is likely defensible, that IF there is an audit the cost (and/or time) of an audit defense may outweigh the benefit of the cost seg. However, with the bonus depreciation (maybe not the correct terminology) it appears to accelerate the depreciation and make the up front savings very significant.

And additional detail that is important / relevant is that I am a full-time licensed real estate broker. I have a hard time imagining that I would not meet the qualification of "Material Participation in Real Estate" as a real estate professional, which would allow me to apply the bonus deprecation toward my earned income as a real estate professional. I still need to look up the IRS guidelines around the qualifying real estate professional. But, part of his point is that IF I do not qualify, it may be a long time before I can take advantage of those losses from the bonus depreciation anyways. Overall, he seems to want to do a basic cost seg for me on the FF&E and Capital Improvements and leave the original basis of the property on the conventional depreciation schedule.

I would love some feedback, personal experience, thoughts on this matter. I need to decide pretty quickly to file for 2023 or file extension and order these cost seg studies. 
 

Can anyone share or recommend a fairly boiler plate disclaimer / advisement to include in our "guest book" and also check-in instructions for the STRs that we own? 

Context: I am also a Realtor in CO and for us it's become important to disclose to would-be-buyers touring our seller listings when there is audio and video recording equipment in use. It's occurred to me that it's probably not a bad idea to include this in our check-in instructions and guest book for our own protection. After all, there is a impact on guest privacy.

Note: we do not actively monitor guests / activity. However, it's important to have cameras for a few reasons, to verify check-ins, security when vacant, evidence in the event of an incident, violations of pet policy, etc.