Offset W2 income with end of year purchase?

Question

Hi everyone, I want to buy a property now intended for LTR.

However, since it’s near the end of the year, my wife won’t be able to qualify as a real estate professional to use the depreciation to offset my W2 income.

Is there another way to allow us to use the depreciation from the property to offset my W2 income this year?

Thank you in advance for any advice :)

Michael Lin · Answer

@Malcomb Stapel, I know you are going to say me 🤣

Maybe I will!!!

Jeremy Horton · Answer

Why can't she?

Just make a journal with the dates, times and activities you spent on Real Estate. Market research (ie: you spending time on BP) counts. I'm sure you can find a creative way to get to 750 hours...

Michael Lin · Answer

@Malcomb Stapel, I talked to a few people but haven’t found one I like so far. Any recommendation? I don’t mind working with CPA who’s outside of my state (CA).

Malcomb Stapel · Answer

You know who should be the first to start one ?

Basit Siddiqi · Answer

even if you had a LTR for the whole year, it would be hard to justify that you are spending 14 hours a week one just one LTR(potentially possible...but sounds difficult).Potentially possible if you brought a STR and was self-managing.

Jeremy Horton · Answer

Ah, I see, no property yet so nothing substantial to deduct. Gonna be hard to do this year - just pass the losses onto next year. You can still deduct other business expenses - internet, phone, computer, printer, home office, mileage etc

Michael Lin · Answer

@Jeremy H. I thought it starts counting after the unit is put in service?

Malcomb Stapel · Answer

Is there a REIA local to you? Somebody there should know someone. Personally I think starting the relationship in person is helpful, versus trying to explain and ask questions over the phone or Zoom.

Malcomb Stapel · Answer

@Michael Lin  are you currently working with a tax strategist? If not, it sounds like you should be. Someone that can be up to speed with your particular situation.

Offset W2 income with end of year purchase?

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