All Forum Posts by: Oscar Ledezma Vazquez

Quote from @Oscar Ledezma Vazquez:

Hi,

My wife and I both have a W2 job and purchased a vacation home in big bear, CA in late 2022 that is being used as a short term rental. I am looking for a CPA that knows the STR Loophole and can help us with offsetting our W2 income and is taking new clients. The CPA I been using isn't versed in real estate and isn't aware of the STR loophole.

i also wanted to consult with a CPA, If it's worth doing a cost segregation for our situation and what are the tax implications.

Thanks!

Hi Oscar,

RE savvy CPAs are not the norm. Doing thousands and thousands of cost segregation studies puts me in contact with these CPAs on a regular basis. Also, keep in mind that most CPAs do their work electronically now. This means that they do not have to be in your state to do a good job for you. They do need to be up-to-date on the nuances of your state taxes.

Short-Term (STR) are a unique niche of the tax laws and require more knowledge. This is not what I would call a "loop-hole" since it is in the tax code as a viable and legal depreciation method. It is just different. Most depreciation schedules are not being done correctly for STR and not catching the tax benefits available or are taking too much straight-line depreciation by putting them on 27.5 year schedules instead of 39 year depreciation schedules.

There are only two ways to off-set your W2 income with STRs. First, you have to actively participate ("material participation") in the management of the property more than any other entity/person, and at least 100 hours/per year. Second, you or your spouse have to qualify as a Real Estate Professional. If you spend more than 2 weeks or 10% of the actual rented days in the property for your personal use, there are additional issues to address with your CPA. If your "rental property" is in another state and you are claiming you materially participate in the management of this property, you may have difficulty convincing the IRS.

To maximize your tax benefits and cash-flow, it is recommended that you do a cost segregation study the first year you purchase the property. Some investors get cost seg estimates on their potential purchases before actually purchasing because the benefits can be very different even if the properties look the same or are at the same price.

Quote from @Oscar Ledezma Vazquez:

Hi,

My wife and I both have a W2 job and purchased a vacation home in big bear, CA in late 2022 that is being used as a short term rental. I am looking for a CPA that knows the STR Loophole and can help us with offsetting our W2 income and is taking new clients. The CPA I been using isn't versed in real estate and isn't aware of the STR loophole.

i also wanted to consult with a CPA, If it's worth doing a cost segregation for our situation and what are the tax implications.

Thanks!

 Not a CPA that you need you need a cost Seg company.... CPAs do not do that, you need a cost Seg engineering company that does this.. About 2k-3k a property, but it will offset your taxable income from W2 you do not need to be a real estate professional. 

If the STR that you have is considered an active investment, it would likely be beneficial to get a cost segregation study done.

Quote from @Oscar Ledezma Vazquez:

Hi,

My wife and I both have a W2 job and purchased a vacation home in big bear, CA in late 2022 that is being used as a short term rental. I am looking for a CPA that knows the STR Loophole and can help us with offsetting our W2 income and is taking new clients. The CPA I been using isn't versed in real estate and isn't aware of the STR loophole.

i also wanted to consult with a CPA, If it's worth doing a cost segregation for our situation and what are the tax implications.

Thanks!

Hi Oscar!

There's definitely tradeoffs you'll want to consider & discuss with a CPA about. I've done it a number of times now, and it's been a nice tax break. The guy I work with is based out of California, Tony Hoong. He's the CPA Dude. Has been great & really knowledgeable. 

Cheers!