All Forum Posts by: Jon Fletcher

@Michael Meegan needs to be rescued by @Greg O'Brien lol

Excellent thread. Thanks @Greg O'Brien

Are Historic Tax Credits essentially just another form of Accelerated (or Bonus) Depreciation? What's the meaningful difference, if any? Particularly since the Tax Credits deduct your basis in the property. 

 Short Term Rentals are considered "active income." Therefore, by creating a loss through depreciation, you are creating an "active loss" that can offset against all of your active income, including W-2 income. This differs from Long Term Rentals, which are considered "passive income" with "passive losses" that can only be offset against other passive investment income. FYI - I'm not a CPA. 

Hi @Rich Hupper you likely qualify for the 20% Federal Historic Tax Credit and the 20% State Historic Tax Credit. Therefore, you can receive tax credits worth 40% of your qualifying construction costs. I successfully obtained Historic Tax Credits for one of my projects. 

If the goal is to offset your high W2 taxes, it seems like you have two possible routes: Your wife could qualify as a Real Estate Tax Professional, or you could use Bonus Depreciation on your Short Term Rental to create a paper loss. Ideally, if you could do both, that would be great. 

@Tom O. my understanding is that the only way you can benefit from these accelerated depreciation losses is if you have a Short-Term Rental. Your decent day job won't prevent you from taking the losses against your W2 taxes. Seemingly, this is where the real benefit of bonus depreciation lies for full-time employees like ourselves. 

Does anyone have an example Cost Segregation Study that they wouldn't mind sharing? For a three-family, or similar sized, property? 

This is a really great article. Thanks for sharing!

Hi Michael, I want to do one. I feel capable of doing it myself based on my professional experience, but my understanding is that it needs to be signed by a licensed architect or engineer?