Hi there,Given the complexity of your situation—owning a rental property in Florida while residing in Illinois, house hacking with your daughter, and planning to claim tax breaks—it might be a good idea to consult with a Certified Public Accountant (CPA) or an Enrolled Agent (EA) who specializes in real estate taxation.While your current tax professional at HR Block has experience with multiple properties, a specialist can offer more in-depth knowledge on multi-state tax issues, rental income reporting, depreciation, and maximizing deductions specific to real estate investments.

I’m thinking this could help us with tax deductions, especially if we operate at a loss.Does anyone have experience with a situation like this?

It’s not absolutely necessary to hire a CPA with just two rental properties, but it can be really helpful, especially when you’re new to the tax benefits and deductions available.

McElhannon: Wouldn't all the other 17 years of expenses (taxes, maintenance, fees, etc)  also be deducted from the price and not just depreciation? 

You can still deduct expenses and claim depreciation without the LLC.

By forming a property management company, you could deduct business expenses like office supplies, software, and possibly a home office, which you wouldn’t otherwise be able to claim.

So, don't expect to be able to do a cost seg study on the property and take a big bonus depreciation deduction, unless the new property has significantly higher value than the exchanged property.  

Hey @Ujwal Kolli,When you do a cash-out refinance on one rental property to pay off the mortgage on another, the interest tracing rules generally allow the interest to be deductible if the loan proceeds are used for business purposes, like paying off another rental.

(These averages represent state-level data, and individual cities may levy additional taxes.)To achieve the same level of cash flow as a property in Nevada, you would need to generate a higher cash flow in Texas to offset the higher operating costs.

😊CA is a pretty easy state to get wage garnishments, all the while interest in accruing on the judgement, and also you can get bank levies.