Short-term Rental Arbitrage - Cost Segregation

[Alex Macias]

Hello, I have three questions related to one topic. In our short-term rental business, we have two properties under rental arbitrage and one property we own and reside in - also doing short-term rental (house hack). This is the first year we will do our taxes using an LLC.

(1) Should we exclude our owned property from the LLC (as far as the operating business, not the property itself), or should we still include it? I'm afraid we would have issues applying for a HELOC in the future, but then again the property itself is not in the LLC only the operating business would be if it makes sense.

Going back to what Amanda Han said on Podcast 370 (49:30) doing the rental arbitrage short-term rentals you can deduct the monthly rent, (2) However, can we do cost segregation on all the furniture that was purchased?

The property we own and house hack on Airbnb, (3) can we deduct not only interest expense but mortgage as well and do cost segregation on the property AND short-term rental furniture?

Thank you for your help!

[Yonah Weiss]

Originally posted by @Luke Carl:

@Alex Macias. @Yonah Weiss

Thanks for the mention Luke! @Alex Macias to keep it simple, the furnishings can be depreciated on a 5-year schedule and are eligible for bonus depreciation. This isn't cost segregation per se, because if you don't own the building, you are not 'segregating' the personal property depreciation from the building structure.