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Furthermore, there are certain transaction participants who you must disclose your identity.

I see there are not a lot of Multi-Families available here so my course of action would be to purchase a single family I would live in with my fiance and then later on purchase another single family to start my business.

Hi BP community,
I'm looking for some creative strategies or advice on a somewhat unique ownership situation.
I co-own a 2-unit multifamily in Hartford, CT (North End) with my sister. I live out of town, she lives n...

That means:Depreciation recapture under IRC §1245 is triggered at the time of sale.You’ll pay ordinary income tax (not capital gains) on the depreciation taken on these components, including bonus depreciation.Even if the replacement property has similar assets, the IRS treats them as newly acquired, so the prior depreciation is recaptured and taxed.Tax mitigation strategies:New cost segregation on the replacement property to front-load fresh depreciation that can offset income (especially useful if you qualify for REPS or STR material participation).Strategically use suspended passive losses or time the sale during a lower-income year to reduce your effective tax rate on the recapture.Consider installment sale or partial exchange structure, if applicable, to spread gain.Let us know if you'd like our downloadable 1031 exchange, we can send that over to help you build out your roadmap.This post does not create a CPA-Client relationship.

The other 2 being still being able to take advantage of tax benefits by materially participating, and having an option with lower impact on cashflow. 

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*This link comes directly from our calculators, based on information input by the member who posted.

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*This link comes directly from our calculators, based on information input by the member who posted.

.* Long-term growth potential* Tax advantages (especially in retirement accounts or with tax-loss harvesting)**Cons:*** No cash flow unless you're dividend-focused* Market volatility: Stocks can drop 20–30%+ in corrections* Less control: You’re a passive participant vs. real estate where you can force appreciationReal Estate Investing – A Smart Supplement:Real estate, especially long-term rentals (LTRs) - could be an ideal complement to your brokerage accounts:* Monthly cash flow for lifestyle freedom* Tax benefits (depreciation, cost segregation, 1031 exchanges)* Appreciation and leverage options* More control over your investmentIf you want something more passive, turnkey rentals in the Midwest or Southeast are great entry points - low-maintenance, managed properties in cash-flowing markets with strong rental demand.You don’t have to choose just one path.

LTRs offer stability, while STRs can produce higher returns, but come with more risk and management needs.STR Tax Advantage: If you materially participate (100+ hours and more than anyone else), you can qualify for the STR loophole, allowing bonus depreciation to offset W-2 income, without needing full REPS status.Use Cost Segregation: Ask your CPA about doing a cost seg study to accelerate depreciation, especially if 100% bonus depreciation returns in 2025.Backup Options: If managing real estate feels overwhelming, consider a Delaware Statutory Trust (DST) for a passive 1031 route, or an installment sale to spread the tax burden over time.Meet with your CPA and 1031 intermediary to ensure your reinvestment strategy is tax-optimized and aligns with your comfort level on risk and management.This post does not create a CPA-Client relationship.