All Forum Posts by: Nicholas Aiola

@Maria Johnson No, you will not be able to bonus depreciate 100% of the cost of the property, only the cost of the personal property assets that were segregated in the cost seg study.

Keep in mind, depending on the details of your STR business, your hours spent in that activity may not count towards the REPS hour requirements.

The nuances and level of detail involved in successfully implementing this strategy require professional guidance. I would highly recommend proactively consulting a RE specific tax professional before proceeding.

@James Sebastian Not necessarily. IRC Sec. 514(c) defines "acquisition indebtedness" and will shed some light on this for you.

@Bobbi Casalino The most tax advantaged way to avoid capital gains is to inherit the house. After the current owner passes, the beneficiaries would receive a step-up in basis to the FMV at the date of death, and the beneficiaries could then immediately sell at (likely) no taxable gain. There are other options of transferring/selling assets in a tax-advantaged manner, but would require estate/tax planning.

@Nancy Bachety I wish I had an answer for you. The IRS is insanely backlogged and it is taking a long time to do anything at IRS headquarters these days. I would not expect an audit to be any different, unfortunately.

@Peter Morgan You should keep a time log with verification to back up the log entries (receipts, mileage logs, email records, calendars, pictures, etc.). I'd recommend checking out the IRS's Passive Activity Loss Audit Technique Guide for more tips.

@Paul Jiang That is correct, That is not considered a rental activity and cannot be aggregated under Reg. Sec. 1.469-9.

@Tom Peterson Sure can. The gain will pass through to you via a K-1, and you can offset that gain with suspended PALs.

@Jovany Espinoza You can do either. Most commonly, the LLC is formed in the state in which the property is located, but check with your attorney about what makes the most sense for you.

@David Mamsa Bonus depreciation is only allowed in the first year the asset is placed in service. If you placed a rental property in service in 2016 but purchased an asset that is eligible for bonus depreciation that was placed in service in 2021, you can bonus depreciate that specific asset in 2021.

@Han T. If you are already in business, these are deductible expenses.