All Forum Posts by: Yonah Weiss

@Jeffrey Davis I don't recall the exact podcast you're referring to, but it may have been @Brandon Hall's The Real Estate CPA .com, he has been a guest on the podcast a couple of times and his website fits the description.

The only real downside I can think of is one is potentially using higher deductions (depreciation can offset ordinary income tax rates) to offset capital gain rates which are generally lower.

Thanks for the mention @Jai Reddy! @Daniel Trzaskos happy to help. As others said above, passive losses from depreciation can offset passive gains from the sale of real estate.

OZ is an option as well, but comes with it's own risks and rewards.

Being that you are a real estate professional, any additional losses you can front load by doing accelerated depreciation would be able to help offset your capital gains after first offsetting your income. How much depreciation you can expect, and if the cost is worth it, are other questions worth exploring.

 Thanks for the mention @Rogelio M. Any type of trust, including a DST will pass the depreciation to the investors (trustees), whether or not they utilize cost seg, is something you will have to inquire about on an individual basis.

@Joe Splitrock it would have to be done through a TIC structure as @Percy N. suggested above. This should have been made clear by the OP. In that case, the basis would transfer into the TIC, which you could continue to exchange upon the sale of that syndication. Otherwise, like any exchange, you are correct, that once you sell without a 1031 you will be hit with the capital gains, and recapture taxes.

 Jeff, check the BP bookstore, there are a couple by @Amanda Han. Also Tax Free Wealth by Tom Wheelright

@Jerome Nunez hopefully @Bernard Reisz can chime in here. He is a CPA and has expertise in LLCs and so many areas of real tax/financial all over the country. One of most straight-shooters 'round these parts. I interviewed him on a podcast a while ago, all about entity structures.

 I appreciate the mention!

It really depends on how much you can use the accelerated depreciation. My general rule of thumb is any property purchased for over $500k is a no-brainer for cost seg, but for STRs it can be even lower for a few reasons:

1) There is usually a lot more furnishings (personal property) that depreciate over 5 years. We're seeing 20-25% of the tax basis.

2) STRs have a lot more net income, so the straight-line depreciation is not nearly enough to cover that (especially since STRs are on a 39 year schedule as opposed to LTRs which are on a 27.5 year)

3) If you qualify for material participation by self managing, you can use the additional passive losses that cost seg creates to offset ordinary income as well.

*check with your CPA, this is not tax advice