Short Term Rental Loophole and Alternative Minimum Tax Impact
Community - My wife and I are high-income earners, each with salaries greater than $150,000 per year. We file separately for a student loan strategy. We purchased, renovated, and placed our first short term rental in service at the end of 2022. We were able to bonus depreciate $40,000 through a cost segregation study which I planned to use to offset some of my tax federal taxes of $40,000. When it came time for filing, my CPA told me that I would not be able to use the bonus depreciation because of the Alternative Minimum Tax (AMT). All I've heard is how beneficial this loophole is for high W-2 earners but how is that the case with the AMT impact? The examples I regularly hear are for physicians, tech workers, etc. who certainly make well more than what we make so how are those individuals not impacted by the AMT? I haven't heard it discussed on any podcasts or forums. Any help or guidance would be greatly appreciated. Thanks in advance!