All Forum Posts by: Yonah Weiss

@Adam Evans I have never seen a pay lake been depreciated, as the lake itself is considered 'infrastructure' and depreciated on 39 year schedule. The shelters and pumps as well. There may be some roads, or fencing, or docks that are considered 'land improvements' but my guess is it would be a small amount. Happy to discuss further.

@Sanjay Sharma It is possible do the cost segregation even though you bought and sold the property in the same year. the real question is, is it worth it? You will be subject to depreciation recapture tax. You do not need to own the property for more than one year, it usually just doesn't make sense. Obviously discuss this with your tax advisor to understand all of the implications.

@Brendan Hula I just answered you on another forum post here, but for posterity's sake I'll copy and paste here too :)

Here are the answers to your questions:

1. Many of the ‘land improvements’ (pavement, concrete pads, fencing, landscaping, etc.) depreciate on a 15 year schedule. Water and sewer are usually considered infrastructure, and their values depreciate on a 27.5 year schedule.
POHs can oftentimes be considered personal property and depreciate on a 5 year schedule (only if they are truly ‘mobile’, potentially movable)

2. Yes, any property that depreciates under 20 years is eligible for 100% bonus depreciation.

3. The limitations are more on the individual, not on the property. Normally, rental property income is considered passive and reported on Schedule E. Depreciation (and a whole lot of it with 100% bonus) is a passive deduction, and is used first to offset passive income. Anything beyond that creates a passive loss, and most people are limited in how much passive loss they can use in the current year.

Someone who qualifies as a ‘Real Estate Professional’, does not have the passive loss limitation, and can use those extra deductions to offset ordinary income as well. If you are not a REP, the passive losses will carry forward to future years until they are used up, or until you sell the property.

4. Yes you are correct, depreciation passes through to investors according to their percentage of ownership.

@Brendan Hula I just answered you on the MHU forum, but for posterity's sake I'll copy and paste here too :)

Here are the answers to your questions:

1.Many of the ‘land improvements’ (pavement, concrete pads, fencing, landscaping, etc.) depreciate on a 15 year schedule. Water and sewer are usually considered infrastructure, and their values depreciate on a 27.5 year schedule.
POHs can oftentimes be considered personal property and depreciate on a 5 year schedule (only if they are truly ‘mobile’, potentially movable)

2. Yes, any property that depreciates under 20 years is eligible for 100% bonus depreciation.

3. The limitations are more on the individual, not on the property. Normally, rental property income is considered passive and reported on Schedule E. Depreciation (and a whole lot of it with 100% bonus) is a passive deduction, and is used first to offset passive income. Anything beyond that creates a passive loss, and most people are limited in how much passive loss they can use in the current year.

Someone who qualifies as a ‘Real Estate Professional’, does not have the passive loss limitation, and can use those extra deductions to offset ordinary income as well. If you are not a REP, the passive losses will carry forward to future years until they are used up, or until you sell the property.

4. Yes you are correct, depreciation passes through to investors according to their percentage of ownership.

@Nicole (Dunlap) Pendergrass thanks so much for sharing such a detailed breakdown. We can all learn a lot from this. Good luck going forward, onwards and upward in 2021!

Happy to discuss in DM, not sure if the rules allow me to post here our pricing.

Definitely looking in the wrong place, in my experience. It has nothing to do with CA. What type of property are you discussing?

The answer is yes you are able to.

As @Lance Lvovsky mentioned, you want to make sure this is beneficial to you, meaning, you can use the extra depreciation.

Thank you so much for mentioning me @Trevor Meleski! I love this post so much! Congrats no your success, but even more importantly your dedication, and continued education. Please keep posting here and share your journey!

This is exactly what @Sterling White just shared on my podcast.

Hey @Mark Edler! Just seeing this now, after we spoke. Thanks to @Dave Foster!