All Forum Posts by: Jeffrey Sicat

@Kevin C. Thanks Kevin, that's very helpful ... so as a new non-RE professionally looks like I have to stick with the regular depreciation schedule ... Thanks for the link ... I'll read in depth!

Thanks David and thanks Jerry for the insight and replies. For me I'm trying to slowly build a passive income stream and not be an active real estate investor (so no BRRRR for me) so I like both your feedback of keeping it simple in terms of entities until I figure out how this all works... I'm excited to get started! Thanks again!

Hi Caleb, thanks so much for the information... very, very helpful!  If I do pursue a cost segregation study for bonus depreciation, do you know how much a ballpark cost would run to do so on a single family residence?  It would be helpful to know (i.e. if very expensive not worth it but if not too expensive could save me considerable tax dollars to be able to bonus depreciate)?

@Jerry W.

Greetings Jerry. Thanks for the reply. No I’m quite interested in buying income producing real estate (for the income - not the losses) and am quite interested in getting started. I’m just trying to make sure I protect myself in terms of entities and there is so much written about depreciation benefits and I’m trying to make sure I truly understand these things instead of regretting that I missed something later in. Any feedback would be appreciated!

Greetings!  I'm a newbie here to Bigger Pockets and excited to start in real estate investing.  I've been reading suggested books here like crazy and going through podcasts galore to learn, learn, learn!  Some questions here and I'd greatly appreciate the expertise feedback from those on this forum!

1) Entities: I have not created a real estate business entity yet to hold my first property but I'd read that since I'm doing traditional borrowing (i.e. 20% down and financing 80% through bank) I'd have to purchase it in my personal name and then after 2-3 months I can transfer to the entity. Thus, when purchasing my 1st property do I even need the entity yet? I anticipate purchasing a starter single family home (i.e. $100,000-$130,000) in the next few months but if I cannot even transfer it into the entity by the end of the year then should I wait to open the entity/LLC until after the new years so that I don't have to file a tax return for the entity in 2020 and wait to create/transfer property/file tax return in 2021?

2) I live in Virginia but first property will be in Indiana. Do I need to just make one LLC in Indiana and is that enough to hold 1-5 properties there eventually? Or I've read of people doing an LLC in the state for several properties and then a master holding LLC in Wyoming or such for more protection. Is that overkill to make an additional holding entity like Wyoming as a newbie?

3) Taxes and Bonus Depreciation:  I have my primary business that gives me significant distributions/K-1 wages on my schedule E as passive income in the ballpark of $50-60k.  I'm trying to figure out how to generate passive losses/depreciation from real estate investing.  If I were to purchase my first rental property before the end of 2020, I realize that the traditional depreciation "loss" would not be that much but I've read about Bonus Depreciation taking more up front.  When I read about Bonus Depreciation thought it seems like this is for large commercial or apartment properties but I haven't seen people doing this for single family homes.  My question is how can I maximize the losses/depreciation on the property to offset the passive income from my business?  Can I do bonus depreciation on a single family home?  Does anyone do a cost segregation study on a single family home?  Is the cost to a cost segregation study so high that it makes it not worth it?  If doing bonus depreciation in this first year about how much could one expect to depreciate on the front end?

4) I'm trying to figure out the maximum way to generate losses / depreciation to offset other K-1/distributions ... any suggestions for a newbie?

Thanks in advance!!!

Jeff