All Forum Posts by: Nick C.

 Thank you Melanie.  I've certainly learned my lesson that not all are created equal and I need to ask more questions before choosing one.  

 Thanks Michael.  I will do that based on the feedback I've received here.  Wasn't sure it was worth pursuing.  Thanks again.

Thanks for the reply. My DST's are through Capital Square and they sent me a document that was titled Cost Segregation Studies & More and it was performed by MS Consultants, LLC. That's what I gave to my tax preparer. If I was supposed to give them something else, I don't know what it is. I did not make them aware but included it with all my other documents and would have thought that seeing I had rental income and mortgage expense that they would have noticed or questioned what the cost segregation study was. I also received a 1099-Misc and 1098 from Capital Square along with a document titled Important Tax information which included a letter calling out the Cost Segregation Study, an income statement and balance sheet.

My 2022 taxes were done by a different firm and this year, they "partnered" with another company who took over tax preparation.  In 2022, I sold quite a few stock options so my taxes that year were a lot higher than normal years and I was expecting 2023 to go back to what I consider normal.  When they didn't, I started looking at the forms and realized both years had depreciation missing.  

I have a feeling that the tax preparer took another shortcut and just used last years return to do this one so it was missed again. 

It looks like the one years worth of depreciation and mortgage interest are enough to offset the rental income so will I be stuck with the carry forward and not able to use it if the DST goes full cycle?

Again, thanks for your help and explanation.  

Hope I can explain this well enough. Background....I invested in two DST's in Jan of 2022. When I received my 2023 taxes back from my tax preparer, I noticed that they included income from the DST's but did not include any depreciation. I then went back and reviewed my 2022 taxes and they were the same (included income but left out depreciation). I had given them the cost segregation studies for both properties that were provided to me but they didn't use them. When I brought this up, they said they could amend my taxes. I picked them up yesterday and they amended 2023 but not 2022. When I asked why, I think I understood them to say they included the depreciation for both years on 2023 and there is a carry forward of losses ($13k).

Is this the right way or best way to do this? My concern is at some point the DST's will go full cycle and I'll continue to have carry forward losses that I won't be able to use depending on the decisions I make at that time. My other concern is that I'd rather have them amend 2022 as well and have the money now. The amended 2023 taxes resulted in a refund of $7k.

Appreciate any insight on this.

Thanks Zach.  I called and asked but am waiting on a reply.  I'll have to look through my return to find Form 4562.  Didn't notice that one initially.

I don't think my tax advisor is claiming depreciation for two rental properties and I'm looking for some help from the BP community. I did a 1031 exchange in early 2022 from a single vacation rental I had into two DST's, each are 300 unit Apartment complexes offered by Capital Square. As part of the tax documents I received from Capital Square, they included cost segregation study for each property.

On Schedule E, I can see the rents received for each property along with the interest paid.  There is also a line (Line 18) for depreciation expense or depletion.  Is this where the depreciation expense should show up?  

I'm going to call my tax advisor tomorrow and ask them but I'm not confident in their explanation so I'm looking for another opinion.

Thanks in advance and I appreciate the help.

 Thanks Joe.  I wasn't aware of 721 Exchanges and appreciate the information.  That's what makes this site great; learn something new every day.

Hi Adrian,

I split my proceeds up evenly and invested in two separate apartment complexes offered by Capital Square.  They are returning 4% which given the current environment, doesn't seem great but that's what was available at the time.  I've received the monthly distributions every month on time so they are performing as expected.  Looking back, I don't know if splitting them up is something I'd do again because at some point they will be sold and in all likelihood not at the same time so I won't have all the money available at the same time unless I do something different.  

It's definitely a lot easier to cash the checks each month and not have to worry about taking care of the property and what renters are doing to it that I would need to fix.  

I was in the camp that sold.  I owned a 4br/3.5 bath cabin for 9 years and sold about a year ago.  When we purchased, I wasn't looking to be in the real estate investment space.  We wanted a vacation home that we could rent out to cover our costs.  Wound up being one of the best investments of my life but I got tired of the abuse and work the cabin required due to how renters treated my property.

I was shocked with how much we sold our cabin for and wondered how someone could make the numbers work.  I have a W-2 job and wasn't interested in self managing, especially since I had never done it before.  With the exception of '20 and '21, our cabin gross was typically in the $50's.  

Here's what our monthly expenses were in 2021

Electric - $236

Cable/Internet - $290 (Comcast are thieves)

Mortgage - $1,200 (I paid additional principal as my goal was to be paid off when I retired)

Taxes were less than $100/month

Misc - my budget was $5K per year and most years I was close to this number.  

Ultimately, I'm glad we sold though I do miss it down there and plan to return at some point but won't use it as a STR. I'm enjoying the life of passive real estate investments.

I'm really in awe of those that do this for a living and do it well.  I was inexperienced and probably did things wrong, but I learned a ton and continue to enjoy reading about everyone else's experiences.  

There were a lot of cabins that went into foreclosure after the recession.  We bought one of them in 2012.  Paid 52% of what the original owners built it for in 2007.  If they would have weathered the storm and held it, they could have sold it for more than double the original price in 2021.