All Forum Posts by: Tanner Bellamy

If the property is gifted to you, they will also give you the property with their basis. So just as Bill said above, you will pay capital gains on any amount you sell over their basis. Their basis is now what they owe on the property. It will be what they purchased it for plus any improvements they have done to it. 

Assuming it is their personal residence for 2 of the last 5, the best thing would be to sell it from their name. That way they can take advantage of the $500k personal residence exclusion. So having some kind of agreement with them that you take profit or get paid however you see fit would be best here. 

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Timing definitely matters. It would be worth speaking to a tax professional especially when you are getting into real estate investing. The door opens wide open for tax strategy then.

Good luck!

Simple answer, yes she could. 

Not as simple answer... would actually be a question... where does she have a drivers license? where does she work? where does she spend most of her time? California would go as far as looking at her credit card statements to prove she spent more of her time in CA. 

My other question would be, for what purpose is she trying to claim residency in CO for?

So there are a lot of questions that go into an answer to your question, @Taylor Cook

Hi @Kayla Utley, 

I have worked with investors that have used the STR loophole to offset all kinds of income. I am still taking on new clients and would love to help you out if you are still looking. You can check out my profile and book a 15 minute call to see if we would make a good fit.

Good luck with your search!

You can definitely amend. However, you may want to speak with someone who knows what they are doing, have them look over what you have already filed, and let them tell you if it would be worth it. 

I wouldn't go it alone or with some simple forum posts in your case. You need someone to dive into the numbers with you. 

I'll start by outlining what a cost seg is. It is a tax tool that allows you to accelerate your depreciation on a piece of property. For example, it will separate out all of the personal property from real property. Personal property is depreciated on a much shorter timeline than the default depreciation life of a rental property (27.5 years). 

You can always use the depreciation from the cost segregation against the income that the activity produces. Where the strategy can get is exciting (and what most investors shoot for) is when you can utilize that depreciation against your nonpassive income i.e. W2 and 1099 income. If you wanted to unlock this, you would have to stick to the average of less than 7 days and hit the material participation requirements. 

I would recommend speaking to a professional if you wanted to utilize either of these strategies. 

I would like to confirm @Katie Ripp 's input but add to it further. The MMLLC will add an extra layer of audit protection being that they are at less of an audit risk than SMLLC's. 

@Vikrant Prakash

You will still be able to use 100% of the expenses that are directly used for the STR and a portion of your personal residence expenses against the STR income.

What Zach is saying here is that you won't be able to utilize the "STR Loophole" which refers to using any net loss from the STR business to offset any income from other sources like W2 income or 1099 business income. This is because you are using a primary as an STR.

Hopefully that makes sense. 

I like what the people above have to say. Though you can get a lot of good information from social media, a lot of the time you will see extravagant things. Another thing to keep in mind is that a structure is usually specific to an individuals own set of facts and circumstances. 

These structures may be good for him but might not be good for you. When you are at that point, spend a few bucks and sit down with someone that will create a structure specific to you.