Bonus Depreciation treatment with non-spouse LLC Partnership, one is REP?

Question

My business partner (non-spouse) and I are 50/50 owners in an LLC that owns a residential ST rental. We purchased the property in 2021 and put into service, after a renovation, in Nov 2022. Opting for residential rental 27.5 years since > 30 days avg rental in first year of service (could be <30 days in future). I qualify for REP, my business partner does not. My question is whether I can benefit from loss offset, primarily from Bonus Depreciation stemming from our renovation, while my business partner can capture loss carry-forwards?

Ashish Acharya · Answer

If you have materially participated in this venture (or combined it with other rentals), you would benefit from losses.

Julio Gonzalez · Answer

As Ashish mentioned, yes you should be able to benefit from the losses. Here's an article full of cost segregation FAQs that may help. Most cost segregation companies should be able to give you a free cost benefit analysis quote to give you an idea of how much it will cost vs what the tax benefits are available to you, specifically. https://www.biggerpockets.com/...

Bonus Depreciation treatment with non-spouse LLC Partnership, one is REP?

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