Availing Cost seg accelerated depreciation as an 'active participant'

[Raja Nahs]

I'm planning to do a cost seg and use accelerated depreciation for properties bought in 2022. My plan is to use this to offset  non-passive income. I know I should qualify as a REP to do this, but my CPA is saying that the first year of property purchase is considered as an 'active participant' and don't have to be a REP. I'm not sure if this accurate.

Would appreciate your insights...thanks a bunch.

[Linda Weygant]

Whether or not you qualify as REP is a test of the full set of facts and circumstances.

There is not "rule" about first year being considered active participant.  That's just.....   either made up or misunderstood.

Perhaps a real estate focused CPA who know these rules inside and out would be a better person to engage with.

[Raja Nahs]

Thanks! He did claim to be a real estate CPA and assured me this is right. I did a lot of research and nothing came up supporting this claim. Maybe time to find someone new.

[Linda Weygant]

Quote from @Raja Nahs:

Thanks! He did claim to be a real estate CPA and assured me this is right. I did a lot of research and nothing came up supporting this claim. Maybe time to find someone new.

 There are many CPAs here on Biggerpockets that have extensive experience in this area.  Interview a few of them to see which one works out best for you.  Working with a CPA virtually is seamless and fairly easy these days.

Best of luck to you.

[Raja Nahs]

Not sure if there is a classifieds section here where I can look up for CPAs by state or something?

[Julio Gonzalez]

@Raja Nahs Having a CPA that specializes in real estate taxation is crucial. I've worked with a number of great CPAs over the years and would be more than happy to provide a few recommendations if you'd like. Please feel free to reach out!