All Forum Posts by: William C.

Based on the facts that follow, please let me know if you think our SFH would be eligible for ANY amount of bonus depreciation after a cost seg study is completed.

SFH purchased brand NEW from Ashton Woods (the builder of the community). Purchased May 2017. Lived in as a primary residence. Placed in service as a long-term rental May 2018. Has been a rental property ever since.

Based on the well known 9/27/2017 cutoff date, we clearly do not qualify for 100% bonus depreciation. But do we qualify for any level of bonus depreciation? How much and through what methodology. We have read notes about 50% bonus or 40% bonus being available to us, because the home was purchased new.

Hoping to gather some opinions. For SFH's that are LTR's (home values approx. $280k with land value backed out) what are the advantages and disadvantages to conducting a cost segregation study when bonus depreciation is unavailable? If the cost seg study will cost approx. $3k, is it worth the cost to bring that depreciation forward on an accelerated timeline. Cost seg in a bonus depreciation setting appears to be a no-brainer, but when bonus depreciation is not possible the advantages seem more murky. Thanks in advance for opinions here.

Purchased a home in August of 2022. It has come to light that the home has substantial water damage on the 2nd floor due to faulty shower tile and shower pan. Estimates say the repairs will go beyond $10,000. It was the opinion of the remediation companies that the leak has been present for much longer than the 7 months we have owned the home for. The water damage was not present in the seller's disclosures. The home inspector made no mention of potential water damage. Has anyone experienced anything similar to our situation? Most interested to learn if we have any recourse (legal or otherwise) to go after the seller for damages. Simply theorizing at this point, so any thoughts would be appreciated. Thank you.

 Thank you for the context. I can say that the outfit in Oregon that works with us for 7%... they have a done a good job for us up to this point. I do not know enough about their balance sheet to speak on their level of financial success however. Same story about the Nevada company at 10%.

Cannot say I know the overall average rent for each location. I do know the average rents for the properties that we own. All are 3+ bed, 2+ bath, SFH, in A or B class neighborhoods. Florida = $2650, Oregon = $2700, Nevada = $2800. You are correct that Florida has the lower average rent when compared with the other 2 states.

Agree that of all the states, the Florida properties tend to have more issues. In a normal year the Florida properties average 5 to 6 service calls. The other states are more in the 3-4 range.

We have a small portfolio of rental properties. All are SFH. The locations are spread out in the states of: Florida, Oregon, Nevada. We employ property management companies for all of them. We have noticed a WIDE discrepancy between property management fees in these three states. Florida (close to Sarasota) is the highest. See below for a summary:

Florida: On-Going Monthly = 10% of Each Month. New Lease = 50% of 1st Month. Lease Renewal = 25% of 1st Month.

Oregon: On-Going Monthly = 7% of Each Month (no other fees)

Nevada: On-Going Monthly 8-10% of Each Month (no other fees)

Market dynamics allow each PM company to charge whatever the market would bare. No complaints about that. If we do not like the service or prices, we are free to move on. We get that. Anyone else out there with similar situations and such large discrepancies from property to property?

 In our opinion, yes we do benefit from the cost seg's on the 2 LTR properties. Our cash flow from 2022 outstripped our baseline depreciation, so we will have a tax bill due on these properties for 2022. The cost seg's will allow us to cancel that out for 2022 and then carry forward for the following tax years.

We ask the question below, because we have contacted multiple (reputable) cost seg study companies and have received conflicting answers. It is hard to tell who is providing accurate info and who may just be telling us what we want to hear in order to gain our business. Posting this hear in hopes of more clarity on our situation. Thank you all in advance.

Property #1 - Purchase Date = 8/2019. Placed In Service (P.I.S.) Date = 3/2022.

Property #2 - Purchase Date = 6/2017. Placed In Service Date = 5/2018.

With bonus depreciation reducing starting in 2023, we would like to take advantage of 100% bonus depreciation in the 2022 tax year by running cost seg studies on 2 of our long-term rental properties. Because of the lag time between purchase dates (we occupied each as our primary residence before converting them to long-term rentals) and the Placed In Service (P.I.S.) dates for each property, will we still be able to realize 100% bonus depreciation if we run a cost seg and then file with our 2022 taxes?

Thank you all for the thought out replies. I did take this information to my PM company to request the rent payments be distributed as they are charged, but my attempt was unsuccessful. They ended up paying me out the full distribution. Their statement was simply that is how they have always handled these situations in the past. Based on current calculations we will outstrip depreciation/expenses and will have a tax bill for 2022 (if all stays the same). That being said, we are not giving up on this one. We are aware we can find a big ticket item in need of repair/replacement and have that taken care of in 2022, to help our tax situation. Any other ideas for ways we can object to the PM company to help them better understand the situation? Thanks in advance for any ideas that can be offered.

We have a tenant that was signed to a lease through Feb. of 2023. They have decided to break that lease and pay out the remainder of the lease in a lump sum. In the state the property resides in, we have a duty to mitigate. So if a suitable tenant is located within the lease window, we must pro-rate that lump sum penalty and kick it back to the previous tenant (we cannot double rent the property). If we are unable to locate a suitable tenant, then we will have received the equivalent of two additional rent payments in 2022 that should have been received in 2023 (Jan, Feb). These rent payments are sizeable and they will have an effect on our tax planning for the year (we will outstrip depreciation now). We do retain a property management company and after asking them, they must distribute the lump sum to us upon receipt (they cannot hold it off until 2023). Anyone out there have experience with a similar scenario? We are trying to see if there is a path for delaying receipt of the 2023 money so that our tax planning can stay intact. Any guidance offered would be greatly appreciated. Thank you.