The land represents ~1% of the purchaseOn the contrary - if you purchase a $2 MM shack in manhattan on a postage stamp lot, the land could represent 99%Lever 2 - % of the property with a shorter useful life.Not all parts of a piece of real estate are depreciated at the same speed.Certain personal property assets have SHORTER lifespans in the eyes of the IRS vs the standard 27.5/39 year livesProperties with tons of this often have:- Over-developed land sites (hardscaping, pools, retaining walls)- Fancy Fixtures- Fancy Furniture (STRs!)

The IRS considers rental income "passive," and losses can only offset other passive income unless you qualify as a Real Estate Professional. 

In other words, the IRS will not allow you to take advantage of double tax benefits. 

Tons of support here so ask away.I am on the lending side of things and would be happy to hop on a call with you anytime to discuss financial strategies and help answer any questions you may have about nearly any loan product available to help you on your journey, even if they are not products my capital partners offer.

The IRS views the houses as inventory.

Or you can sign up with a company like Solo 401K, use their IRS approved documents, and spend about $750.  

You will receive a report as a result of the cost segregation study that supports the breakout between asset classes and new depreciation schedule in the event that you are audited by the IRS.

The IRS tends to scrutinize W-2 employees claiming REPS, and there is only one tax court case I know of where a W-2 employee qualified.

From what I’ve read recently in the Wall Street Journal, the IRS doesn’t seem too picky about who manages the property initially.. what matters is that it’s actively being rented out.Now for Question 2, the key part to keep in mind is whether you hit that 100-hour rule in terms of participation for 2025.

Google "IRS tax rates" for your filing status.