All Forum Posts by: Account Closed

Hey Kymberly, what if you could pay 0% tax? As an agent, you can qualify as a real estate professional and take real estate losses against this potential gain you have coming up. Additionally, you could look into the possibility of depreciation that comes with a new build which could create more losses. Would have to know more to see if its possible!  

Jarrod, i would consider focusing on airtight around a personal guarantee. Ideally, if they have other properties, getting collateral on that as well. 

 It would have to be "commerical property" where you can take advantage of a cost segregation study. These are usually not done on single family homes or properties with 1-4 units. 5 units and above your good to go

If you have ever used an AirBnB and are interested in investing in real estate, this post is for you!

For individuals navigating the demands of a w2 job and grappling with substantial tax obligations, exploring the potential of short-term rentals unveils a compelling avenue to mitigate tax burdens. A noteworthy tax loophole, particularly beneficial for those yet to attain Real Estate Professional Status, offers a strategic approach to potentially offsetting OR EVEN ELIMINATING the impact of high job-related taxes.

At its core, this tax loophole revolves around discerning between passive and non-passive activities within the realm of rentals. Those whose rental pursuits fall under the non-passive umbrella may find solace in this tax-saving provision. The federal tax code establishes stringent criteria, including guest stays limited to seven days on average and the provision of basic hotel-like services, to qualify for this advantageous tax treatment.

Understanding the mechanics of the short-term rental tax loophole is imperative. Section 469 of the federal tax code initially classified all rental properties as passive. However, an essential exception emerged in the 1990s, allowing specific rental income to be categorized as non-passive. To leverage this benefit, prospective property owners must engage in short-term rentals and provide substantial services to guests, such as daily cleaning, meal provisions, or transportation services.

Additionally, navigating a material participation test becomes crucial. This entails dedicating a significant amount of time and effort to the short-term rental business. Meeting the test criteria, which includes working over 500 hours in the business, overseeing all necessary tasks personally, or substantially participating alongside a partner, facilitates the strategic utilization of the short-term rental tax loophole. For individuals tethered to a W-2 job, this presents an opportunity to judiciously manage their tax liabilities while exploring supplemental income avenues.

If this sounds like something that fits your investing goals, please reach out. We would be more then happy to assist in answering any questions!

Thank you for the post on this Julio! This is a tool we explore with clients who want "off the Ferris wheel" use when they want to make that jump from active to passive. 

If you pair the dropping of the rates and same amount of inventory with letting the population get used to 6-7% rates then drop them back in the 5's the market will be flooded with buyers again.

100% agree here. To much cash on the sidelines to expect a huge drop in the near future IMHO 

I love to see a fellow Zach win! Congrats man. I see your a realtor, are you qualifying as real estate professional with your accountant?

Congrats on the latest deal Al! If you need an accountant who knows how to help you offset your w2 income via the short-term rental loophole, let us know! we would be happy to help 

We just used VRBO and had a great experience. Would you please elaborate more on Tax options? I maybe able to help

Hello Shawn! . Registered agent address is not the same as a mailing address, or a principal business address, each of which serves different functions depending on the state. When you formed the LLC, what address did you use? That is the one you should put. As for the EIN, that is on the IRS letter called "EIN Assignment Letter" Hope that helps!