All Forum Posts by: David Crothers

@Michael Plaks

Thanks for the information. There's some helpful pieces in there to provide more clarity for me.

To be clear, I'm not trying to make a loss on my STR properties, it would be really difficult to do so as they're both busy and cashflow very well.

What I'm trying to understand is if my STR's bring in $40K annually and my expenses are $20k annually, can I offset the $40k with the $20k in expenses? Only paying taxes on the $20k in non-passive income?

I just want to make sure I'm taking advantage of all my available tools.

Thanks a bunch for the help!

Hi all,

I've been reading posts on BP for some time now and I'm hoping the community might be able to provide some suggestions. 

I'm in a bit of a tricky situation, my household annual combined joint income between my wife and I is $250k and ~$40k in STR between two properties. We purchased the second property this year for $225k. Our other STR is above our garage. Both properties are busy and I manage all the cleaning, up keep, maintenance, etc. I would qualify as materially participating.

Now, because annual income is over $150k our deductions are phased out on schedule E. Maxing out 401k's don't help as we're already doing this. 

Would it be advantageous to start a property management company and charge a management to the properties? Charge for maintenance, mowing, upkeep and renovations?

Does a cost seg make sense for a property valued at $225k?

Any suggestions on how to structure my situation and minimize tax liability? We've paid $15k-$20k in taxes each year since we started our STR which is about half of what we take in for income. I don't mind paying taxes but there's still a lot of expenses that go into these rentals monthly.

I'm in the process of trying to find an experienced CPA to help me with this but I'm located in Vermont and it's been impossible to find an available CPA.

Any advice would be greatly appreciated. Thank you!