All Forum Posts by: Aaron Zimmerman

You would definitely need a CPA and then an attorney to draw an agreement up between siblings

There’s a lot of good CPAs on these forums - which would be a good starting point. If you’re willing to have a remote relationship with a CPA, it will Open up the talent pool!

There’s a lot of CPAs in these forums that work 100% remotely. If you’re open, that would expand the pool of potential CPAs!

I have a bookkeeper but only for quickbooks. Pm me if you’d like it 

There are multiple material participation tests that you can use. 
(1) 500 hours - unlikely you’d hit this.

(2) 100 hours and more time than any other single individual. 

(3) substantially all the activity is done by you (this is not as cut and dry but generally 70% of all time spent is a good starting point). 

To deduct your short term rental losses against active income, you need to materially participate, have an average customer use period of 7 days or less, and not use your short term rental for personal use in excess of 14 days or 10% of fair rental days. 

The question is: can you materially participate? And can you rent it out for at least two times before end of year? 

The answer should be yes to both of these. At that point, you can engage a cost seg company. 

All this should be done with close planning with your cpa. 

There are a lot of good areas within Chicago that a lot of other people have mentioned. Anywhere along the blue line on the NW side has been solid. It depends on your long term goals and where you want to live. Choose where you want to live/where you’re comfortable with living and then target properties. Fellow house hacker here. Let me know how I can be of value!

I have a client that’s in a similar boat and the husband and wife file separately. Feel free to PM if I can be of any value!

What questions do you have regarding short term rentals?

You would need to keep track of all purchases before it was placed into service. Let’s say you purchased $10,000 of furniture before you advertised for rent on 9/1. You would start depreciating the furniture on 9/1. If 2022, you get 100% bonus depreciation for furniture. If 2023, you get 80% bonus depreciation. 

de minimis safe harbor election only applies once the property is placed in service.

Preston- really depends on the situation but generally MFJ will be more advantageous. That being said, whoever you go with for your tax return can easily separate out you and your wife and tell you what’s best in your situation. For house hacking, a portion of the expenses will be allocated to you personally (either non deductible or on schedule A), and then rental (put onto schedule e). The depreciation will be allocated in the same manner. There are tons of articles online (some written by members of this community) that explain in more detail.