All Forum Posts by: Joseph Palmiero

Unfortunately you cannot offset your gain with the passive losses.  Land held for investment is considered to be nonpassive.

You will be able to claim and depreciate the improvements once the house is ready to rent and advertised with the intention of renting it out.

@Steve Vaughan is correct.  You cannot use a 1031 exchange to defer taxes on a flip.  There are strategies around this but it is too late to set up if you are closing in 2 weeks.

The issue is meeting the requirement of an average stay of 7 days or less to qualify as a short-term rental.  How do you calculate this for a mixed-use property?  Experts have differing opinions on how to approach this. One possible solution is to divide the property into two distinct activities and keep separate records for each. The cost segregation would be on the whole property, but only the loss from the short-term rental activity could be used to offset your w-2 income, assuming material participation in that activity. Ultimately, the decision depends on your personal risk tolerance and the potential tax benefits.

 Generally yes, as long the divorce agreement meets certain criteria.  The exclusion is limited to $250,000 for each of you.  You also have to account would have to account for the rental portion of the house and depreciation recapture.

Generally, as long as you are both on the title, then both of you could take advantage of the 121 exclusion if she has continued to live in the house.

Sorry for your loss.  Don't forget that you get a step-up in basis to the fair market value of the property as of the date of your mom's death.  This will help you on capital gains tax if you sell the property down the road.

You will pay tax on the income (rental income minus rental expenses) at your normal rate on your personal return.

I would check your lease to see if it prohibits sub-leasing.  As a landlord myself, I would like to know if my tenant was sub-leasing my house.