All Forum Posts by: Natalie Kolodij

Ooofffff ......

It's like she's so wrong she almost has it right haha 

So the ironic part is- you likely qualify for them to be non-passive becuase it's < 7 days, material participation is likely ect. 

But STR are 39 years-they don't meet the definition of a residential rental proeprty for 27.5 years.

And IRC 469 has the defining factors between passive an non passive losses for a reason. Just saying becuase your "business" is real estate doesn't make these losses deductible magically. That's why real estate professional status exists and has very strict defining factors to it. 

I would recommend working with someone who is real estate specialized. Based on how she is doing things this would NOT be defendable in audit. It's pretty critical the tax professional understand the actual strategies and legalities around what they're doing...and isn't just...going with a feeling.

If you materially participate as well then the losses are deductible. 

Schedule E. 

Only on C if you provide sub services, only SE tax if Sub services (reported on C)

There won't be excess loss leftover for year 2 most likely- 

Having it be non-passive removes the loss limit. 

So if you use cost seg + bonus to create a $50k loss year 1, you get a write off aginast your income that year in full. 

Year two you can convert it to a LTR without any type of"pay back" or such

Oh boy. 

Welp. 

I'm going to quote thumper on this one "if you can't say something nice, don't say nothing at all". 

I would just reach out to @Michael Plaks above to see if he is accepting clients. 

Unfortunately a lot of CPA's don't know how to handle short-term rentals correctly, at all. I'm confident Michael does though. I'd start there since he was kind enough to respond earlier. 

 Nope. There are pretty set rules around what qualifies and w2 doesn't unfortunaely regardless of how long you've done it. 

I wuold recommend using @Linda Weygant for this. 

She works with a ton of investors who house-hack and is nothing short of an expert on the topic. I beleive she's actually accepting new clients right now too which is kind of rare. 

For every 5 CPA's retiring right now, only one new one has entered the industry. 

In 2014 70% of currently practicing CPA's were set to retire in the next 10 years (we're there)

My friend is a university professor in IT (but his family business is a tax firm where he's worked his whole life) he was telling me how in the past two years their school has had 0 students sit for the CPA exam. 

Any how- so just to add to whatv everyone above said. Any one who's great at their job...but sitting around without a full workload during their busy season, in any industry...should be a red flag. 

I just wanted to add a little more context to the why. Plus we had a tonnnnn of tax law changes the past 3 years during covid which wasn't normal at all, the IRS is barely operational, notices, ppp laosn, stimulus checks, ect- I know a ton of folks who just retired or sold  in the past couple years too. 

Something being in an LLC doesn't make it a business asset.

It being rented for a business/profit motive does. 

Your personal home being in an LLC would not make any of your personal expenses now deductible. Your repairs would still be non deductible. Any renovations you do on your primary are not deductible but can be tracked for when you sell (they increase your basis in the property) 

Your personal mortgage interest and taxes are potentially deductible on Schedule A if you itemize. 

Putting your rental in an LLC may potntially cause you to lose lower property taxs with your county, cause lending issues and more.

Great post Michael. 

A Tax Strategist and a CPA are absolutely not the same. 

Many CPA's don't even work in tax, some do, and some are amazing- but even then many don't know REI.

I received this message on IG 9 minutes ago 

"My CPA said since my w-2 income is above $150k I cannot deduct my air bnb activity losses. Is there a spcific code section I can send him to show otherwise". 

Linda who commented above is REI specialized and I would recommend reaching out to.