Here's how you can calculate it:Total Tax Benefit from Cost Segregation: Let's say the total tax benefit from the cost segregation study for the entire property is $2 million.Total Capital Raise: If the total capital raise for the project is $6 million, this represents the total capital contributed by all investors, including limited partners (LPs) like yourself.Your Investment Amount: You mentioned that you invested $100,000 as an LP.Now, to calculate your portion of the tax benefit, you can use the following formula:Your Tax Benefit = (Your Investment Amount / Total Capital Raise) * Total Tax BenefitUsing the numbers you provided:Your Tax Benefit = ($100,000 / $6,000,000) * $2,000,000 = $33,333.33So, based on your investment of $100,000, you would be entitled to approximately $33,333.33 of the total $2 million tax benefit from the cost segregation study, assuming you have sufficient passive income to claim the passive loss.Please note that the tax treatment of these benefits can vary depending on your individual tax situation and the specific tax laws in your jurisdiction.

This is the default tax treatment for foreign investors.Ownership Through a U.S.

The tax treatment could vary based on the percentage of time the property is used for personal use versus rental.Advantages/Disadvantages:Advantages of your current arrangement might include potential tax deductions related to the rental portion, such as property taxes, mortgage interest, and operating expenses.Disadvantages might involve complexities in tracking expenses and income, and potential limitations on certain deductions if the property is not rented out for a significant portion of the year.If you were to convert SFH2 into a full rental without personal use, you might qualify for certain tax benefits associated with rental properties, but you may lose some of the personal use benefits.

However, the tax treatment of these LLCs can impact the separation of assets and liability protection.

Thanks for writing Ben.When you are "house hacking," which typically involves living in one of the units of a property you own and renting out the others, the tax treatment of depreciation can be a bit nuanced.

The depreciation deduction can significantly offset rental income, providing investors with a valuable tax shield.Capital Gains Tax Benefits:When real estate appreciates and is sold for a profit, investors can benefit from favorable capital gains tax treatment.

However, the specific tax treatment can depend on the accounting method you use for your business.There are two common accounting methods for small businesses:Cash Basis:Expenses are deducted in the year they are paid.If you are on a cash basis, you can generally deduct the expenses for the heating and air system in the year you made the payment, even if the property is not yet in service.Accrual Basis:Expenses are deducted in the year they are incurred, regardless of when they are paid.If you are on an accrual basis, you may be able to deduct the expenses in the year they were incurred, even if not paid.In either case, it's important to keep detailed records of your expenses, including receipts and invoices, to support your deductions.Please note that tax laws can be complex and subject to change, and the information provided here is for general guidance.

Consider options like setting up a limited liability company (LLC) or utilizing a real estate investment trust (REIT) to take advantage of favorable tax treatment.6.

Thanks for anyone reading this and considering helping me out.I want to hear if other CPAs are aware of an exception but my initial conclusion would be this is a taxable transaction since 721 allows for nontaxable exchanges for property.There is a difference in treatment of receipts of a profits interest and a capital interest.

The treatment of real estate losses on your tax return can vary depending on your specific circumstances, and it's important to follow the tax laws correctly.