Here's why this happens:The ARR is simply the average of the annual returns, without considering the actual capital invested or how much money is lost or gained over time.

We thought that it seemed like SROs fill a valuable niche, and that property owners who manage them stand to gain high-density cash flows commensurate to the high-density living.How did you find this deal and how did you negotiate it?

Not to mention if you profit $10,000 or $20,000, you have to pay capital gains tax on it. 

Connecting with locals who have experience in this area is a fantastic way to gain insights and avoid common pitfalls.Since you’re looking to buy in the next 12 months, I recommend starting by networking with other investors and real estate professionals in the area.

Thanks that will help I’m gaining some contacts and want to reach out to them to see who I would want to work with. 

Since you’ve already gained experience with partnerships and deal structuring, those skills will serve you well in any path you choose.

Also your capital gain is lowered the more you bonus.If you are going to accelerate you need to really consider how much personal property there, how long you're going to hold it, any offsets available, alternative transaction structures like installment sales or even delaying it a year.Publication 5653 (6-2022) (irs.gov)It lists four more including the ones below.The detailed engineering cost estimate approach (or detailed estimate approach) is similar to the detailed cost approach.

If we wanted to sell it now, would we pay capital gains tax since we transferred it to our business?

If you do not sell all units you can benefit from the capital gains tax.

First thing I see is you're close to hitting the 2 years OO for a tax free sale on any gain...obviously you don't currently have any gain, but if you can wait it out then any future gains would be tax free...it gives you some wiggle room later.