All Forum Posts by: Shyam Subramanyan

Quote from @Ryan Kelly:

@Shyam Subramanyan if you are not a “real estate professional” in the eyes of the IRS, you cannot use added depreciation to offset your W-2 income. It would simply sit in your passive bucket and rollover to future years, negating the benefit. Don’t spend the time and money on cost seg unless it can benefit you in the same calendar year.

@Ryan Kelly good question. If my wife and I manage all aspects of our STR business (no property manager, self-managing all of our bookings and guests, accounting, rehabs, working on repairs and maintenance ourselves) as we've been doing the last six years, would we be considered real estate professionals?

If I don’t want to rush, can I still file/pay my 2023 taxes as is and then amend the return over the next few weeks to get money back?

Quote from @Michael Plaks:

Quote from @Shyam Subramanyan:

I have three STR properties that my wife and I have self-managed but from a tax perspective we've only taken the normal depreciation the last few tax years. However I am wondering if I can do cost segregation for all these properties for 2023 taxes since I owe quite a bit of taxes due to high W2 income. I also do not expect high W2 income for 2024 and beyond, so 2023 might be the best year to do this for the best tax savings. I did look at some of the material participation criteria and we should easily surpass the requirements since we pretty much spent time improving the home ourselves, managed all guest communication, etc.

Yes you can. The project is not for DIY though.
Given that we have only 3 weeks before the IRS deadline, it's tough. You need to do cost segregation on all 3 properties and then find an accountant who knows how to do the catch-up. 

The fastest and cheapest cost segregation is through DIY software, but it has significant drawbacks:  
https://www.biggerpockets.com/forums/51/topics/1136752-expla...

Some areas (like mine) have extended deadline beyond Oct 15th.

Thanks Michael. Is there a DIY to figure out if it’s worth to do a full effort cost segregation? I still have a little more than three weeks left and curious to know why it would take any longer than two weeks for a firm to do cost segregation. Also assuming CPAs don’t do the actual cost segregation, what kind of professionals do it?

I have three STR properties that my wife and I have self-managed but from a tax perspective we've only taken the normal depreciation the last few tax years. However I am wondering if I can do cost segregation for all these properties for 2023 taxes since I owe quite a bit of taxes due to high W2 income. I also do not expect high W2 income for 2024 and beyond, so 2023 might be the best year to do this for the best tax savings. I did look at some of the material participation criteria and we should easily surpass the requirements since we pretty much spent time improving the home ourselves, managed all guest communication, etc.

Thoughts?

Recently stayed at a 29 palms property as a guest and the host was a photographer herself. Patricia Knight: https://www.yelp.com/biz/patri...